If you own a car, you must – legally and rationally – be insured.
- Auto insurance protects you against risks related to owning a vehicle: Personal injury and property damage caused by accidents and other man-made or natural causes
- All states legally require that you have at least minimal liability coverage if you drive on public roads.
- If you have a car loan, the lender will insist that you are insured up-to the value of the loan.
Types of coverage
Liability: Pays for any damage you cause to others (or damage to you caused by uninsured drivers)
Collision: Covers the damage to your car due to an accident
Comprehensive: Protects against damages to your car from vandalism, theft, fire, flood, etc.
Medical/Personal injury protection (PIP): Pays for medical expenses for auto accident related injuries
Other (Towing, Rental, Gap, Umbrella, etc.): Indemnifies you for other costs related to your car.
How to save money on auto insurance
Be a safe driver: The longer and cleaner is your driving record, the less you will pay for car insurance
Increase your deductibles: A high deductible (as long as you can afford it) will reduce your rates
Ask for discounts: Insurers give a variety of discounts based on how much you drive, the type of car you own, if you have multiple vehicles, and maybe even the school you went to. Ask your agent.
Improve your credit score: If you have good credit, you will get a better insurance rate.