Car and Vehicle Insurance

Regardless of where you call home, car insurance ranks as an inescapable must, making it as imperative as fuel in the tank when it comes to operating a car, motorcycle or commercial vehicle. Every state (except New Hampshire and Wisconsin) requires every driver to legally carry a minimum amount of insurance so as to financially cover bodily or physical damages resulting from a car accident.

There is no national rate. Minimum insurance amounts, or financial responsibility requirements, vary by state. Depending on where you live, you can meet legal obligations through a variety of ways:

• Traditional liability insurance coverage through a state approved carrier. This is the most popular option throughout the country.
• Self-insurance. This is usually limited to owners of multiple vehicles.
• Surety bond.
• Cash deposit with your state treasurer. Amounts vary by state.

Remember, not every state offers all four options. But every state does offer insurance company coverage.

Car insurance is comprised of six types of coverage:

• Property damage liability: Covers property damage caused by your vehicle. Some examples include other vehicles, buildings and fences.
• Bodily injury liability:Covers the medical costs of passengers in your vehicle or another vehicle resulting from an accident caused by you.
• Personal injury protection (PIP): Also referred to as “no-fault” insurance, it, in addition to medical expenses, usually covers lost wages and funeral costs.
• Collision: Covers your vehicle’s repair costs, minus your chosen deductible.
• Comprehensive: Protects your vehicle from damage caused by hail, flooding, fire, theft, animals and vandalism.
• Uninsured/Underinsured motorists coverage: Protects you from drivers with no or limited insurance and if you’re the victim of a hit-and-run driver.

Some options, depending on your state, are mandatory, while others are discretionary.

There are no flat fee insurance rates or premiums. Many factors come into play, beginning with the size of your deductible (amount of cost you pay before your insurance company’s plan kicks in). Most insurance carriers offer several options to select from. The higher the deductible you choose, the lower the premium you pay. Or vice versa. The choice is yours.

Other factors determining your premiums include:

• Age: Drivers under 25 can expect steeper rates. Based on statistics they’re recognized as the road’s high risk drivers. Conversely, drivers between the ages of 50 and 65 are rated as the safest.
• Marital Status: A married driver can expect lower premiums than a single driver.
• Geography: City residents have higher premiums than rural residents. More drivers means more risk.
• Driving Record: Speeding tickets, DUI infractions and accident reports on a driving record equate into substantially higher insurance rates
• Vehicle Type: The more expensive the vehicle, the higher the premium. Or vice versa.
• Credit Rating: Insurance companies charge higher rates for applicants with poor credit ratings, viewing them as risky.
• Occupation: Drivers who use their vehicles for delivery service or making house calls can expect higher rates than someone with a desk job.
• Mileage: Higher premiums are charged to drivers with long work commutes and/or high annual mileage.
• Theft Protection Devices: Car alarms are championed by insurance companies, reflecting in premium savings.
• Multiple Cars: Many insurance companies offer package incentives for families with multiple vehicles.

And perhaps one of the most overlooked factors is patience. When it comes to selecting an insurance carrier, take the time to shop around. Each company offers different rates for different situations. Most can provide you with a quote within minutes via the phone or online.