Each year, an estimated 5,200,000 car accidents happen in the US alone. That is a car accident about every 60 seconds, according to the National Highway Traffic Association 2021 report.
If you own, lease, or rent a car, you should consider auto insurance to deal with the expenses that come with vehicle damage or accidents involving injuries. Auto insurance will not prevent accidents or damages to your car or truck. Instead, it will help you pay the bills when accidents happen.
Auto insurance defends a vehicle owner when they get in accident, or when their vehicle is damaged or vandalized. When anything happens to your car due to accident, theft, or vandalism, auto insurance will cover the cost of repair or replacement.
Damage to your car or truck is a financial burden that can be expensive. Depending on how bad an accident is, the repair cost varies. In some states, a driver is expected to have at least one type of auto insurance or risk losing their license. An auto insurance will cover the cost of car repair after damage, pay liability if an individual gets injured in an accident, and also care for the medical bill or funeral costs.
Auto insurance covers many costs and people under it. The insurance will cover anyone who drives your car with your permission, such as a friend or family member. When someone takes permission from you before driving your car or truck, the insurance will cover them if an accident occurs.
Auto insurance has many layers of coverage, each with its own limit -- this means not all auto insurance pays the same amount. The amount you're willing to pay and the type of damage you want to cover will determine the type of coverage. Like all things in life, you get what you pay for. Auto insurance should not be a policy to be cheap with as it's an exposure most people have every day.
Some incidents that auto insurance covers are examined below. Let's look at them.
- Crash Coverage: If your car collides with another or is involved in a crash, the insurance will potentially take care of it no matter who caused the crash.
- Medical Coverage: Medical expenses for you (if you are injured) and your passenger after a crash will be taken care of by the insurance. It will also include funeral costs depending on the situation.
- Liability Coverage: The injury or death that occurs when you cause an accident is under auto insurance too. It includes the repair cost of any property you damage.
- Underinsured / Uninsured Motorist Coverage: Two categories of people here are the underinsured/uninsured. An underinsured person has a very small insurance coverage plan while an uninsured person has no insurance at all. If you are involved with any of these drivers, decent auto insurance will pay for the expenses incurred. This means if an uninsured driver damages your car, and the driver has no insurance, your insurance coverage will cover the cost of repairing your car.
- A comprehensive Plan: A comprehensive plan is often needed if you lend out a car/truck. This plan will pay for repair costs or give you the amount of the car's value if it's stolen. It is also good for damage caused by flood, vandalism, explosion, or if you hit an animal.
TIP: the recommended coverage for your liability, including underinsured + uninsured, is $100,000 for property damage and $300,000 for bodily injury. To lift your total limits well above this limit, a personal umbrella policy should be considered.
Quite a number of things are not covered in auto insurance, so it's important to review your policy and make sure you understand your coverage. Below are common situations that may not be covered:
- If the car/truck was driven by someone without a license.
- If the driver is under the influence of alcohol or drugs.
- If the car is damaged by war.
- Personal properties in the car (this is covered under you home insurance)
- Added accessories like DVD screens and other types of things you added to the car to beautify it.
- Accidents that occurred when you use a car for commercial activities (this is covered under your business insurance)
- Damages that occur during a riding-sharing period (unless specifically endorsed)
- Damages that are more expensive than your insurance plan.
Regular repairs are also not covered by auto insurance. Regular repairs include tire replacement, problems with the car brakes, and other cases not caused by accident. Wear and tear is not covered by your insurance.
TIP: The best way to understand what is covered, and what is not, is to go over your policy with your insurance advisor.
Simply put, every car, truck, or automobile owner needs auto insurance. Accidents can happen at any time and this can cause damages to the car and injury to you or another person. With auto insurance, the cost of repair and medical bills will be covered by the insurance.
Don't think your experience is enough to keep you out of trouble. Even when you're experienced and careful, you can still make mistakes that can lead to accidents. Also, your excellent driving skills can not stop theft or vandalism. These things can happen anytime, anywhere, and for any reason. Therefore, you should get auto insurance to help deal with any bad incident quickly.
If you also lend vehicles to people, make sure you have insurance in case anything happens to the vehicle. Remember that you can't control the driver or the environment when you lend a car out. The best you can do is to get insurance to cover the cost of repair when an accident occurs.
The cost of insurance is something that is often prioritized over coverage. You will certainly pay less every month or year if you have low limits, exclusions, and a bad insurance company.
The premium you pay depends on numerous factors. Here's list of the most common things that affect pricing:
- Policyholder Age: the younger you are, the riskier you are.
- Marriage Status: single people pay higher premiums
- State: certain states have higher rates
- Vehicle Value: the higher the value, the higher the price
- Driving Record: poor driving records drive up the price
- Prior Accidents: prior accidents increase premiums
Another cost to keep in mind is your deductible. You can increase your deductible to reduce total premiums, but be prepared to pay the deductible if you get into an accident.
TIP: if you are a safe driver or don't drive often, then having a higher deductible can make sense.
We could have our algorithm give you a quote in 10 minutes. But your business deserves better than that. You deserve a dedicated insurance advisor and service team who knows how to manage complex risk.
Your personal insurance advisor will negotiate the best coverage, at the best rate, from the best insurance carriers. Because anything less wouldn’t be acceptable.
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