What You Need to Know About Car Insurance

By Kaitlin Hurtado on April 22, 2017

Depending on whether you drive or not, car insurance may seem like a foreign phrase to you. It may still be foreign if you have been driving for a while and are only mildly aware of it because you know you need it, but you’re not exactly sure what it entails and why you actually need car insurance in the first place.

Car insurance is financial security that covers you in case of a car accident, providing coverage for medical expenses, repair costs, legal fees, and the various other costs that could stem from a single car accident.

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Why you should get car insurance

Car insurance may seem like another cost to factor into an already tight budget, but it could be what saves you financially when you get into a car accident. Regardless of how good and safe of a driver you believe you are, there are other drivers sharing the same road as you and countless factors that can affect the chances of you experiencing a car accident.

Like any insurance, car insurance requires you to pay a fee — a premium — to your insurance company in order for the insurance company to cover financial losses you may receive in the case of an auto-related accident. The amount of money you pay and the amount of money the insurance is supposed to cover varies depending on the policy chosen and the situation you may find yourself in.

According to Trusted Choice, traffic accidents cost $299.5 billion in the United States annually, and those crashes cost $61,600 on average; car insurance will most likely be the thing saving you from taking a huge financial blow from a car accident.

Know what kind of car insurance you can have and what kind of coverage you actually do have 

There are different types of car insurance you can have that will cover different types of accidents, including liability, collision, comprehensive, rental reimbursement, medical, uninsured motorist, and roadside assistance.

Liability means that your insurance will cover the fees created from an auto accident you are ruled responsible for, like legal fees, and medical and repair costs. Collision coverage will have your insurance pay the repair costs from a collision with another vehicle/object after you pay a set up-front amount: the deductible.

Regardless of who is found at fault in a car accident, medical expenses will cover the medical costs for you or a passenger of the vehicle of the accident. If your car gets damaged by something other than a car accident, like a fallen lamp post, comprehensive insurance will cover your repair costs.

Uninsured or underinsured motorist coverage will pay for medical and car repair costs you suffer from an accident when the driver at fault cannot fully cover them because they are underinsured or do not have car insurance to begin with (or in a hit-and-run situation).

Know your costs and buy your car insurance

You have two options when it comes to buying your car insurance: going directly to an insurance company or enlisting the help of an independent insurance agent. If you choose to go directly to an insurance company, take more caution as to what you are signing up for as many larger companies have money in mind rather than your best interests.

Independent insurance agents will be well-versed in car insurance, something that you most likely won’t be when looking for car insurance by yourself. They are employed to help you personally and to scope out different policies from different companies that best suit your needs rather than generalizing you as another client needing the average car insurance policy.

Remember that you do have options, and just like any other big purchase or commitment you would make, thoroughly review those options and weigh the pros and the cons of each car insurance policy. Each car insurance policy varies (the pricing of the deductible and premium, coverage limits, and type of coverage) and you want to make sure you have what you will need and that it will actually help you when it comes time to use it. The cost of the car insurance you pick will vary according to what type of coverage your policy entails and the type of coverage you are required to have varies according to the state you are registered in.

The amount of money you sign on to pay for your premium and deductible also affects the total cost you are going to be paying. The premium is the fee that you will be paying each year in order to have car insurance and the deductible is the amount that you pay yourself before your insurance policy kicks in and provides coverage to pay the rest of the costs acquired. The lower the cost of your premium, the higher your deductible will be, and vice versa.

By Kaitlin Hurtado

Uloop Writer
Hello! I'm Kaitlin, a second year Literary Journalism major at UC Irvine. I'm a writer on Uloop's national team and a campus editor for UCI.

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