Car Insurance Tips
Tips for finding cheaper car insurance. This is easier now you can search online and get multiple car insurance quotes from all major insurers in your state.
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Car insurance FAQ to answer all your questions
What is insurance?
This is a simple contract between you and an insurance company. You pay a premium and, in return, if you suffer a loss in the way described in the contract, you are allowed to claim enough to cover what you have lost.
How does insurance work?
If one person has an accident, he or she pays all the losses. But if hundreds of people doing the same thing all group together and pay into a common fund, those who are unlucky enough to have a loss can be paid out. The others have peace of mind. The insurance company estimates how much will be required to cover all the losses in the next year, adds the cost of administering the business and a profit margin, and divides that amount among the members of the group as a premium. Insurance spreads the risk of a loss by a few among many. The result is everyone pays less.
What is car insurance?
In fact, the use of “car” is misleading. It covers all the main types of vehicle used for moving people around from the smallest two-wheeler to the biggest truck. In reality, car insurance is coverage for anyone using the public roads to get around.
What is mandatory insurance?
In all but three US states, the law requires every driver to carry a basic minimum amount of liability insurance. This makes some money available to pay for the medical treatment or repairs if you injure someone in a traffic accident. Most people do not have thousands of dollars sitting in their bank accounts just in case they injure others.
What is collision and comprehensive coverage?
As the name suggests, collision coverage pays the cost of repairing your own vehicle should you be involved in an accident. If the cost of repairs will be more than the vehicle is worth, the insurer will declare a total loss and pay you the current market value of your vehicle. This lets you buy a replacement. Comprehensive coverage pay if your vehicle is damaged or lost in some other way, e.g. swept away in flooding, vandalized or stolen.
What other forms of coverage are available?
There is a range from policies to protect you should you be hit by an uninsured driver, to covering the cost of towing your vehicle to the repair shop, hiring a replacement vehicle while yours is repaired, and paying for your own medical treatment.