Renewing your annual insurance cover is yet another auto expense to add to your already lengthy list. Although some people scan their policy’s fine print, many motorists would struggle to give a breakdown of their coverage. New drivers are even less likely to understand the process.

As the average cost of car insurance continues to rise, it’s important to familiarize yourself with the available options to find a good deal. By making small changes, you can drastically reduce the cost of your annual bill. Installing the best car covers and an anti-theft device or getting defensive-driver certified can positively affect your insurance rates. If you’re looking to get up to speed on your motoring costs, here are the answers to 20 common questions about car insurance.

Is Car Insurance Mandatory?

Auto insurance is a mandatory requirement in most U.S. states. However, minimum insurance obligations vary depending on the state. New Hampshire and Virginia are the only states that do not require liability insurance for drivers.

Are There Different Types of Insurance?

Yes, there are several different types of insurance coverage. Most drivers have minimum insurance requirements, but you might want to consider purchasing a more extensive policy.

• Bodily injury liability
• Property damage liability
• Personal injury protection
• Collision coverage
• Comprehensive coverage
• Uninsured or underinsured motorist coverage

How Much Does Car Insurance Cost?

There is no fixed cost for car insurance. Several variables can affect the price, from your driving experience to the type of vehicle you currently drive. The average cost of car insurance across the country is $1,348 annually.

Where Can You Buy Car Insurance?

Motorists generally buy from one of three sources:

• A national auto insurance company
• A regional auto insurance company
• An independent insurance broker

Depending on your situation, insurance preferences, and the insurer you’re in contact with, any of these sources are good options. The most important factors to consider are price and coverage details.

Does Your Car Type Influence the Insurance Rate?

Yes. The brand, model, engine size, vehicle size, safety rating, and value have a major influence on insurance costs.

Does Driving Experience Influence the Insurance Rate?

Yes. If you’re an experienced driver with a good record, you should qualify for discounted rates. However, if you’re a young and inexperienced driver, you’re likely to receive much higher quotes.

What Other Factors Affect My Insurance Rate?

Auto insurers base their quotations on risk assessment algorithms. These algorithms take many factors into account, including personal information. Some of the main elements considered are:

• Age
• Gender
• Marital status
• Residence
• Your credit score
• Type of cover requested

How Do I Choose the Best Coverage?

The policy you purchase is a personal choice. While many people focus solely on cheap insurance, this can be risky. In the event of an accident, you may not receive adequate coverage. It’s best to find a balance between maximum coverage and what you can comfortably afford.

What is an Insurance Premium?

An insurance premium is an amount you must pay to acquire an insurance policy. Since insurance rates fluctuate, you must pay a premium within a specific amount of time to get your desired policy at your quoted price.

What is an Insurance Deductible?

An insurance deductible is the amount you must pay when you make a claim before your insurance company takes over responsibility. For example, if you have a $500 deductible and are in an accident that results in a $1,000 repair, you will need to pay $500, and your insurer will pay the rest.

Can Other Drivers Be Added to an Insurance Policy?

You can usually add relatives and drivers living under the same address to your policy. However, in most other circumstances, a driver will need their own insurance policy.

Do You Need Separate Insurance for Different Vehicle Types?

Yes. Motorcycles, commercial trucks, RVs, buses, and ATVs all require individual insurance policies.

Is It Possible to Get Insurance Discounts?

Yes. Many insurance companies offer discounts to drivers who meet certain criteria, particularly if you can prove your commitment to safe driving. They may also reduce their price to match a competitor’s offer. Make sure to ask your insurer about discounts before agreeing to a policy.

Should You Hide Any Information from an Insurer to Get a Better Rate?

No. Honesty is paramount when acquiring insurance. Failing to disclose necessary information can lead to legal problems and may void your policy if you’re in an accident, leaving you without coverage.

If You’re in an Accident and Not Insured, What Will Happen?

The severity of your punishment depends on the situation and the laws of your state, but driving without insurance can lead to a lawsuit or criminal charges.

Do Insurance Policies Cover Rentals?

Many insurance policies cover rental vehicles. However, it’s vital that you confirm this with your insurance provider before driving your rental car. Several insurance companies specialize in policies for rental vehicles.

Does Insurance Cover Wear and Tear?

General wear and tear of the engine and body of your car are not covered by insurance. The owner must cover servicing and general repair costs.

If I’m Being Turned Away by Insurance Companies Because of My Driving Record, What Can I Do?

Some insurance companies offer special policies to high-risk drivers who have poor driving records. While the cost may be high, it could be your only option.

Can an Insurer Reject an Accident Claim?

If an insurer can prove that the driver was driving dangerously or recklessly or gave false information regarding the accident, they can reject an accident claim.

Is it Possible to Change Your Policy?

Yes. You may always change your policy. However, depending on the fine print, you may need to pay a cancellation fee.

There’s No Room for Second-Guessing When It Comes to Your Safety.

When it comes to the safety of you and your family, there’s no room for second-guessing. What’s more, saving hundreds of dollars on your annual insurance costs can help your family’s finances significantly.

Don’t hesitate to contact your insurer if you’re unsure about anything to do with your policy. Shop around for the best deal before committing. Make yourself a better option for the insurance companies by proving your commitment to safety through driving certifications, installing an alarm, and protecting your car with a high-quality car cover.