Car insurance can be overwhelming, confusing, and frustrating all at the same time. However, if we want to drive, we need car insurance.
There are only two states in the country that don't require insurance (New Hampshire and Virginia), but in both states, the at-fault driver is still on the hook for all of the damages. So it's in your best interest to opt for the insurance.
Whether you're new to car insurance, brushing up on the facts, or you happen to be a car insurance aficionado, we've put together a list of 13 car insurance facts, filled with things you need to know (and a couple of quirky stories).
Let's start with the basics. Car insurance is a contract between you and the insurance company that protects you from loss due to theft or damage. In exchange for paying your premium, the amount of money you spend each year, the insurance company will pay the losses outlined in your contract.
Car insurance typically covers you in three areas; property damage, a liability when you cause damage to someone else's property, and medical coverage when you need treatment after an accident.
Once you understand the role of car insurance, the benefits become obvious. When you're insured and are involved in an accident, your insurance steps in. If you're at fault for the accident, the insurance company will take care of the damages you caused as outlined in your contract.
So instead of having to pay for property damage and medical bills out of your own pocket, your insurance company steps in and takes care of it for you. It can also help you cover lawsuits and legal fees.
In most states that require you to have insurance, you will receive fines if you're caught driving without it. Avoiding those fines is a benefit in itself.
Getting your car insurance is a pretty straightforward process now with the internet. In just a matter of minutes, you can be up and running with your plan. It's important to shop around first and not choose the first plan you come across because the prices and coverages will vary.Before you begin you will need information about your vehicles and the drivers you plan on insuring. Nothing complicated here, just general information about the car and the driving history of the drivers.
There are even companies now like progressive.com that will allow you to compare their prices against their competitors.
This question isn't easy to answer because there are many variables that come into play. Things like your age, driving history, and even where you live will determine your rates.
If you have a clean driving record, your rates will be lower. If you're older with more driving experience, your rates will be lower. If you live in an area with a history of claiming little on their car insurance, your rates will be lower.
In 2018, the sweet spot seems to be about $1,426 per year, or $118.63 every month.
If you want more details, below is a list of the average premium in each state (plus D.C.) in the U.S.
If you live in Vermont you'll be happy to hear that you're paying the least amount, on average, for your car insurance at $932 per year.
However, if you're a resident of Michigan, you're paying the highest amount for your car insurance at $2,239 every year.
The national average is $1,365, so in Vermont, you're paying $433 less than the average, and in Michigan, you're paying a whopping $1,337 more than average.
Here's a full listing of the average yearly premium by state:
The British insurance company Admiral had a plan to use an algorithm to analyze social media usage to identify safe drivers in an unprecedented use of customer data. They planned to use the Facebook accounts of first-time car owners to look for personality traits that are linked to safe driving. People identified as conscientious and well-organized will score well.
Don't worry though, the idea was scrapped at the last second due to Facebook blocking the company from using their customer data.
The type of car insurance you should get depends on your needs. If you are making payments on your car, you are typically required to have full coverage on your car. Meaning no matter what happens, your insurance company steps in.
There are six main types of car insurance:
There are several reasons for this.
Statistics also show that women are less likely to:
Add it all up, and women pay less for car insurance than men.
A 23-year-old man from Alberta, Canada took advantage of a loophole to save some money on his car insurance. After finding out he would save about $1,100 on his insurance if he was a female, he decided to be a female.
Well, sort of. He got a doctor's note explaining that he identifies as a female (even though he doesn't) and then changed his license and birth certificate to reflect that. Then he submitted the paperwork for his car insurance, and voila, he saves an extra $1,100 a year on his insurance.
You would think so because as the name implies, it only covers damage done to the third party and not any damage that was done to you. However, it's been found that full comprehensive coverage is often the cheapest.
The reason is this: Typically the people that opt for third-party coverage are high-risk drivers. They choose third party insurance to keep their rates low. The insurance companies noticed this and reacted accordingly, raising the prices of their third party insurance.
Want to save some money without sacrificing your coverage? Here are a few tips that will allow you to do so.
Unfortunately, living in the wrong zip code could cost you hundreds of dollars on your car insurance. With everything else being equal, people that live in less affluent neighborhoods will pay more than their neighbors in wealthier areas. In some cases, these people are right next door to each other.
The Property Casualty Insurers Association of America said in a statement that the rates vary due to factors like weather, congestion, legal costs and road quality.
You can form your own opinions on this issue.
The German car Emil launched Germany's first pay-per-mile insurance program that measures users mileage in real time.
Their customers base a low monthly fee, and then a few cents per mile on top of that. Drivers who don't use their car very often stand to save a lot of money this way.
The program works using a dongle that plugs into your diagnostic system. The app that powers the dingle also gives your car other smart features, such as tracking the vehicle's location, a "driver's logbook," and remote diagnostics.
First of all, let's talk about what makes the best car insurance company the best car insurance company.
Based on that, here are 10 incredible auto insurance companies.
USAA: Customers report that they love USAA for its customer service, ease of filing a claim, and frequent updates on claim status. USAA customers also report that USAA is a good value, and USAA's average annual rates are some of the lowest in the business. Not everyone can reap the benefits, however, because it's only available for the military and their families.
Travelers: Travelers' customers report that they appreciate the customer service Travelers provides, and the company gets high marks for its claims process. You get what you pay for though because Travelers' average annual rates are a bit higher than average.
State Farm: State Farm gets high marks from its customers for ease of filing a claim, and many State Farm customers say they're likely to renew their policy with the company. State Farm rates are, on average, lower than most of the competition.
Geico: Geico customers say it's easy to file a claim with the company, though some were unhappy with status updates from the insurer. Most Geico customers would recommend it and plan to renew their policy.
Farmers: Farmers gets high marks for ease of filing a claim, customer service, and how claims are resolved but lower scores for value. That might be because Farmers' rates, on average, tend to be higher than the competition.
Nationwide: Nationwide's customers are generally happy with the company's customer service and how claims are resolved.
Progressive: Progressive customers are satisfied with how easy it is to submit a claim to Progressive but are less positive about the company's customer service, communication, claim resolution, and value.
Allstate: Allstate agents offer supplemental, limited benefit insurance coverage that can help with doctor bills, hospital stays, and even some non medical expenses if you're dealing with an accident, disability, cancer or critical illness.
Liberty Mutual: The benefits of utilizing Liberty Mutual car insurance discounts include savings that could amount to hundreds of dollars. Each discount could help you save 10 to 15 percent for something as simple as your membership with AAA or AARP.
American Family: Customers said filing a claim with American Family was easy. For more than 80 years, American Family Insurance has given its customers peace of mind by making their insurance experience easy and convenient.
There you have it. If you're new to car insurance, I hope you learned something while you were here. Car insurance can be overwhelming and frustrating, but it's necessary.Don't be intimidated at the thought of buying car insurance. Do your research, pick a plan, and then adjust as necessary.