Too Much to Handle? Is Having An Auto Insurance Right for You? – Imagine right now you are driving your car then suddenly the engine is having a breakdown the nearest service station is about an hour’s drive and the most embarrassing thing is you do not know anything about the car. While the situation can make you feel frustrated, this why in most states having car insurance is mandatory except for the state of New Hampshire but with so many policy and monthly fee to pay a question may come up as soon as you hear the word insurance which is having car insurance right for you?
There are many reasons why you should own a car insurance one of them is to save you a lot of headache like one scenario above you can feel how stressful it is if you are in that situation you will think about flat tires, tow assistance, and service fee but with the insurance it can help you to ease the pain by covering the charges that may be beyond your financial limit.
How does car insurance works?
Buying car insurance nowadays is relatively easy, especially in this digital world where almost everything is accessible through online search. With so many car insurance companies available online, you can compare and choose the best company that has the best interest for you. But how the car insurance works? What is the process? First of all, the car insurance exists to provide financial protection against damage you may cause to the car by taking the risk out of you and spread it to build a business, the process itself could be simple first here’s how it works:
- You go to any car insurance company and request for a claim
- Then the insurance company will send a broker to see how much value your car has to the marketplace
- The broker might ask you basic questions about your age, marital status, driving habits, and driving record.
- After that, the broker will hand over the report to the underwriter.
- The underwriter will exclude the risk and decide how your insurance look like
- Then the result will be made
- And finally, you will have an insurance deal
What you will have if you have a car insurance?
The basic service every insurance company has to offer is its coverage. Coverage provides you, your passengers, and your car financial protection from spending a lot of money if you get into an accident. Car insurance companies usually offer you many kinds of coverages, but to get the best coverage you have to know which one that you need, here are some coverages the car insurance company has:
- Bodily injury Liability insurance that can cover for the injured party or other person involved in a car accident.
- Personal injury protection covers the medical bill and lost wages when you or your passengers are injured in a car accident.
- Uninsured motorist insurance, this coverage is essential if you are involved in a car accident caused by another driver who has no insurance coverage.
- Property damage insurance that can cover the damage to someone else’s property
- Collision insurance pays for the car repairs if you are involved in an accident.
- Comprehensive insurance helps to pay for the damage or loss to your car.
- The roadside assistance that can help you if you need towing service or other roadside help.
- The uninsured motorist property damage insurance, just like the uninsured motorist coverage, but this time it covers for the car repairs caused by another driver.
What affects the insurance price?
You may wonder why the broker wants to ask you questions about personal information regarding the car. The information is used to consider how much you should pay for the insurance coverage. Other than that, here are a few factors that can influence the insurance price.
- How old are you
A static by NAIC shows people under the age of 25 pay more premium (around $4.500) compared to their older counterparts (age 30-60) which usually pay for around $1.000.
- Where you live
The insurance price may vary around the state. States like Maine, Wisconson, and Idaho might have the cheapest insurance rate around $995 because most of its population is already covered but states like Michigan, Lousiana, and Flordia have the highest insurance rate around $2.350.
- The car you drive
What type of car you have will make a huge difference for the insurance price because if the value of your car is high for the marketplace, the car insurance company will raise the price of insurance since it costs more to insure.
- How much you drive
The more you drive, the higher the chance of you to get an accident. So the car insurance company might lower the price if you drive less.
What if you don’t have car insurance
Depending on which state you live, some state might not require you to have car insurance like New Hampshire, and Virginia but they require you to show proof that you are capable to cover for the finance charge if you are involved in a car accident. If you don’t have car insurance it will become difficult to drive, and you might get immediate penalties and fines.
- Your driver license could be suspended
- Your vehicle may be towed
- You could get a ticket if law enforcement finds out that you are driving without insurance
- You have to pay full for the damage you caused to an accident.