Auto insurance is a necessity for anyone who owns a vehicle. It provides protection against financial loss in the event of a car accident or other covered incident. If you are shopping for auto insurance or have recently purchased a policy, you may have questions about how it works and what it covers. The following FAQs are here to help answer any questions you may have about auto insurance and provide you with the information you need to make informed decisions about your coverage.
Auto insurance is required in every state except New Hampshire and Virginia, where you are still liable if you cause an accident. It’s important to note that different states have different rules about how much and which types of coverage you must have; an insurance agent can help ensure that you are properly covered.
If an accident is someone else’s fault, and they have insurance, you can file a claim with their insurance company. If the accident is your fault, you will be liable for damage to yourself, your vehicle, any involved party’s vehicle or property and the medical costs of anyone you injured. Car accident liability costs are not dischargeable in bankruptcy.
Medical payments coverage pays for medical costs incurred by you and/or the passengers in your vehicle. Personal injury protection is similar but more robust, often covering additional things like lost wages if you can’t work, ongoing care costs and more.
The term “auto” insurance is a bit of a misnomer, since it also covers vehicles like pickup trucks, SUVs and passenger vans. Standard auto insurance, however, does not cover commercial vehicles like semis and will typically not cover a larger rental vehicle like a box truck.
You can choose different deductible amounts for different types of auto insurance coverage (collision, comprehensive, uninsured motorist, etc.). Some of the factors that could affect the amounts you choose might include how much you can afford to pay out of pocket if you have a claim, how much your vehicle is worth and how much your monthly premium amount will change based on the deductible(s) that you choose.
Start by contacting the Claims department of your and/or the other party’s insurance company. (If an accident is your fault, your insurance company will pay. If it is another driver’s fault, theirs should. If you aren’t sure whose fault it is, you can file with both.) The phone number is often listed on your proof of insurance card, or you can visit the company’s website and file a claim online.
Not usually, unless your item is something that has been added to the vehicle itself (like custom rims). But the good news is that homeowners and renters insurance typically include protection for belongings left in a vehicle. So if your laptop is stolen from your car, you can probably file a claim under your homeowners policy.
Some of the additional coverages you may be able to choose are rental car reimbursement (so you have something to drive while your vehicle is being repaired); roadside assistance (towing, flat-tire repairs, battery jumps); gap insurance (to cover the difference between what you owe on your vehicle and its current worth); new car replacement (so you get the newest version of your vehicle if your current ride is totaled); and more. Ask your insurance agent for a complete list.
Lower your monthly expenses and have more money to put towards other important things in your life.