How Does Car Insurance Work?

“How does car insurance work?” We know this question is asked regularly. Knowing how car insurance works is important to make sure you’re protected every time you’re behind the wheel. To make sure you have the right insurance coverages for your car, start by finding an insurance company that you can trust. If you get into a car accident, your car insurance can help pay for injuries or property damage after you file a car insurance claim.

 

Finding the right car insurance is easier than you think, especially if you’re shopping online. In fact, you can research coverages, get a quote and buy car insurance online all from the comfort of your home. Before you get started, it helps to know the answers to these questions:

 

• What type of car do you drive?
• How many miles a year do you drive?
• Where do you live?
• What is your driving history?
• Who will drive your car?
• Did you have any gaps in car insurance coverage?

What Is Car Insurance?

Car insurance can help pay for:

 

• Repairs
• Medical expenses
• Rental fees

Your state likely has car insurance requirements for certain coverages that you’ll need to follow. Learn more by reading through our auto insurance definitions.

 

What Is the Purpose of Auto Insurance?

Why is car insurance important? Without it, you’d have to pay for costly claims out of pocket. This could put your personal assets at financial risk. If you’re wondering how to find the best car insurance company, start by researching as many as you can. This will help you compare car insurance quotes and the benefits that each insurer offers. For example, we offer extra perks that drivers can enjoy with their car insurance policy, such as helping find a repair shop or getting a rental car.

 

How Does a Car Insurance Deductible Work?

When you get a car insurance policy, you’ll choose your coverage limits and deductible. If you get into a car accident and file a claim, you’ll have to pay a deductible before you get coverage from your policy.

 

Deductible amounts can range from $250, $500 and $1,000. If you choose a high deductible, your rate for car insurance may go down, but you’d have more out-of-pocket claims costs. The opposite is also true if you choose a lower deductible, so you’d have lower out-of-pocket costs, but your rate may increase.

 

What Does Car Insurance Cover?

Your car insurance can help you cover different costs if you get into an accident. We offer different car insurance coverages that you can add to your policy, such as:

 

• Medical payments coverage
• No-fault insurance
• Collision coverage
• Comprehensive insurance
• Auto glass insurance
• Car insurance towing coverage
• Rental car reimbursement insurance
• Bodily injury liability insurance
• Auto property damage liability
• Uninsured motorist bodily injury
• Uninsured motorist property damage
• Underinsured motorist
• Gap insurance

Do I Need Car Insurance?

Most states require drivers to carry car insurance. If you don’t, you’re not only responsible for claims costs, but can also face fines, penalties and possible criminal charges.

 

Your state’s car insurance laws will tell you the minimum amount you need for bodily injury liability and property damage liability coverages. It’s up to you if you want to add more coverage. Remember if you have more coverage, you can avoid paying out of pocket for repairs or injuries. For example, if you add collision coverage and comprehensive coverage, this can be considered full coverage auto insurance.

 

We can work with you to help you understand how much car insurance you need and get the right amount of coverage for your car insurance policy. You can start by getting a car insurance quote. Or find out how to switch car insurance.

 

How Is Car Insurance Priced?

When you get a quote, insurers use a car insurance calculator to determine your cost. They look at different factors, such as your:

 

• Driving record because a clean claims history means you’re a safe driver.
• Location, since more populated areas can increase your risk of an accident, vandalism or theft.
• Coverage history to make sure you’ve had continuous auto insurance protection.
• Vehicle details, such as the make, model and year.
• Driving habits because the more you drive in a year, the higher your rate may be.
• Deductible amount because a higher deductible can lower your rate.

Every car insurance policy is unique to the driver. Our specialists can help you get the right policy and let you know what your car insurance cost per month will be.

 

How Long Does It Take to Get Car Insurance?

We make it easy for you to find the right car insurance. Within a few minutes, you can get a car insurance policy:

 

• Online
• By calling 888-413-8970
• Through an agent

Common Questions About How Car Insurance Works

How Does Auto Insurance Work for Rentals?

If you’re driving a rental car and have rental car insurance coverage, you may not need additional insurance that the rental company offers. You’ll be able to skip their coverage offering that pays for medical bills, theft or vandalism.

 

Learn more about if you need rental car insurance.

 

Does Car Insurance Cover the Person or the Car?

Typically, car insurance covers the car. So, if someone else drives your car and gets into an accident, your insurance company helps cover the claims.

 

How Does Insurance Determine Car Value?

If you get into an accident and your vehicle is totaled, it means repairs cost more than the value of your vehicle. After you file a claim, car insurance companies can use information from an appraisal company and an adjuster to determine a car’s value. Insurers make offers based on the actual cash value of a car, which is less than the replacement costs, or what it’ll cost you to get a new vehicle.