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HOW TO GET CAR INSURANCE IN THE US

After doing some research on how to get a car, you have finally purchased one. We're sure you can’t wait to take it for a drive. But before you hit the road, we recommend you get your car insured. Accidents do happen, and when they do, insurance is what keeps personal finances from taking a hit.

As is the case with almost everything in the US, car insurance laws are also dependent on each state’s laws. However, drivers are legally required to carry an active car insurance policy in almost every state except in one: New Hampshire.

Learn how insurance policies work, their average cost, and what you should make sure they cover when you have a tight budget. There’re plenty of options to choose from, let us help you find yours.


How to get car insurance in the US


WHAT SHOULD MY POLICY COVER?

The amount of liability coverage you choose to carry will depend on your personal preference and the laws in your state. In almost every state you’ll need to carry your state’s minimum liability coverage to drive your car on public roads. This is why it’s important to learn how much liability insurance is required where you live. Beware of the risks of getting only the minimum required, though. If you don’t have enough liability coverage to pay for the damages and injuries you cause, you might have to pay the rest out of your own pocket.

Liability coverage is the most basic form of auto insurance and does not cover you or your vehicle in an accident. It provides protection to other drivers from bodily injury or property damage caused by you in an accident. Failing to obtain necessary liability coverage could result in a suspension of your license, fines, or jail time.

Regardless of what state you live in, when it comes to car insurance policies we can broadly speak of two main categories:


  • • The basic or compulsory coverage

  • • The optional coverage

It is up to you to choose which level of coverage you want to subscribe to, but know that if you choose a basic option the coverage rates will be lower. The higher you go, the higher the refund conditions will be.


1. THE BASIC COVERAGE

As part of the minimum liability coverage, each state may require you to get the following:


  • Property Damage Liability: it pays for damage done to another person’s property as a consequence of an accident. Such as, vehicle damage and repairs, reparations of damaged structures, or removal of debris.

  • Bodily Injury Liability: this coverage pays for injuries a driver causes to others, including other drivers, passengers, and pedestrians.

  • Medical Payments: it pays for the treatment of injuries you or your passengers have had in a car accident, no matter the cause. It also pays for medical expenses if you or a family member is hit by a car while on foot or when travelling in another person's vehicle. If you are in a car crash and don’t have this coverage, you’ll have to pay out of your own pocket for your medical bills. This is why this coverage is required in most states.


2. THE OPTIONAL COVERAGE

Physical coverage to your vehicle is a separate coverage you can elect to add to your car insurance policy. If your vehicle is leased or financed, for example, you may be forced to hire a more comprehensive coverage. This is because the lender or dealer would want to protect their interests.

Some of the optional policies are:


  • Collision insurance: it covers damage to your vehicle in the event of an accident, such as a fender bender or a collision with a fixed object.

  • Comprehensive coverage: it pays if your car is stolen or damaged by animals, fire, flood, vandalism or something other than a collision.

  • Towing and labor coverage: it covers the cost of towing your car if it can’t be driven. It also pays for labor if a flat tire needs to be changed or jump-start is needed.

  • Uninsured Motorist Bodily Injury Liability (UM or UMBI): this covers you, your insured household members (resident relatives), and your passengers for bodily injury, personal injury, or death caused by a driver who is not insured (uninsured).

  • Personal Injury Protection (PIP): this coverage provides assistance for medical expenses and wages loss after an accident. If you don’t have health insurance, PIP is worth considering.

NOTE: some of the coverage in this optional list may be compulsory where you live. Since there’s so much variation from state to state, we suggest you take this as a guide. Make sure you check what minimum requirements apply to your state.

WHAT TO CONSIDER WHEN YOU CHOOSE A COMPANY

Unlike most things in life, the coverage you’ll get is not strictly proportional to what you’re willing to pay; paying more for your insurance does not necessarily mean you’ll get a better insurance policy. This is why it’s essential to compare companies and prices to find the right fit and get the best deal. Make sure you check not only the price but what each policy offers.

Here are some tips that may help you decide:


  • • Consider smaller insurance companies; they offer much lower rates than larger competitors in many categories.

  • • Visit insurance comparator websites and look at the offers and users comments

  • • Do a price/quality comparison

  • • If you've had traffic tickets, a DUI, or other violations, remember to research three and five years after the incident, as surcharges may drop significantly.

  • • Do not hesitate to compare the rates of your insurance to others on the market every six months. Sometimes companies offer substantial discounts to new customers.

Here is a non-exhaustive list of well-known insurance companies that may be worth exploring:


- American Family
- Amica
- Auto owners
- Erie
- Farmers
- Geico
- NJM
- Progressive
- Shelter
- State Farm


HOW MUCH WILL IT COST?

The minimum price you may expect to pay varies from company to company and from state to state. Most companies offer a monthly payment but you can choose to pay once a year on the anniversary of your subscription. On average, a car insurance in the US may cost around $1,674 per year for full coverage or $139.50 per month. The price may be affected by some of the following factors:


  • • Your age and gender

  • • Your credit history

  • • Your annual mileage

  • • Where you live

  • • The brand, model, and the age of your car

  • • The level of coverage and the company chosen

Now you know what you need to consider to get your car insurance. Don’t forget to do your research to choose the option that best fits your budget and needs. Drive safely and enjoy your stress-free ride!


[enjoy your car]

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