What is auto insurance?
Auto insurance protects you against monetary loss if you have an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.
Auto insurance provides property, liability and medical coverage:
- Property coverage pays for damage to or theft of your car.
- Liability coverage pays for for bodily injury or property damage caused by the policyholder.
- Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
An auto insurance policy is made up of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you're making payments to a bank or leasing company, your lender may also have requirements.
Most auto policies are for six months or a year. Your insurance company should notify you by mail when it's time to renew the policy and to pay your premium.
Why do I need auto insurance?
It's really all about protecting yourself financially.
- If you're in an accident or your car is stolen, it costs money, often a lot of money, to fix or replace it.
- If you or any passengers are injured in an accident, medical costs can be extremely expensive.
- If you or your car is responsible for damage or injury to others, you may be sued for much more than what you have to spend.
- Not only is having insurance a important decision, many states require you to have at least some coverage.
Questions to ask your agent
It it your Independent Agent's job to find auto insurance that meets your specific needs. Here are a few things to ask yourself as you get ready to talk to your agent:
- How much can you afford to pay if you get in an accident? (To keep premiums low you may want to have a higher deductible and be willing to pay more for repairs.)
- What is the insurance company's level of service and ability to pay claims?
- What discounts are available? (Ask about good driver, multiple policy and student discounts.)
- What's the procedure for filing and settling a claim? (Ask who to call and what happens after you file a claim.)