Information to Automobile Insurance – Bankrate.com

Bankrate's insurance experts will walk you through the basics of auto insurance. Our exclusive approach can help you feel more confident about your insurance decisions.

The central theses

  • Car insurance is a financial product that protects your finances from the consequences of accidents and injuries.
  • Car insurance consists of many different types of coverage.
  • Comparing car insurance offers from different providers can help you find the right policy for your needs.
  • Many factors affect your auto insurance rates, including your age and gender (in most states), the type of vehicle you drive, your driving history, and the specific coverage you purchase.

What is car insurance?

Understanding the basics of car insurance can help you choose a car insurance policy that is best for your needs. Car insurance is part of a larger type of insurance called property and casualty insurance, which also includes household insurance, boat insurance, and rental insurance, among other things. Insurance is a financial product. Car insurance doesn't really protect your car; it protects your finances. Depending on the coverage you purchase, auto insurance is designed to protect you from the financial damage that can result from a car accident.

You can opt for liability-only insurance that protects your finances from the consequences of damage to someone else's vehicle or property, or from personal injury, or you can opt for fully comprehensive insurance that provides financial protection for damage to your car . Insurance is also a pool. Everyone brings in a little bit of money – your premium amount – so that in the event of an accident, everyone loses a little, but nobody loses everything.

Types of auto insurance coverage

Car insurance is a package of several types of cover. The type and amount of coverage you choose will depend on your specific situation. When doing a car insurance comparison, make sure that the same types and limits of coverage are included in every offer so that every business is on a level playing field. Some common types of coverage are:

  • Personal Injury Liability: This is used to cover the cost of injuries that you cause to another party in an accident.

  • Property damage liability: This pays for damage that you cause to someone else's property in the event of a culpable accident, such as B. Damage to another car, building, or personal property.
  • Cover for uninsured and underinsured drivers: This cover can cover your damage and injuries if you are hit by a driver who is not or insufficiently insured to cover your costs.
  • Collision: This covers the damage to your car caused by colliding with another vehicle or object.
  • Comprehensive: Often referred to as “out of collision”, this covers damage to your car caused by a variety of scenarios including theft, vandalism, storm damage, weather damage and animal hit. When you add fully comprehensive and collision insurance to your policy, you acquire “full coverage”.
  • Health Insurance: This is used to pay for your and your passengers' no-fault medical bills due to an accident. It may be mandatory, optional, or not available depending on where you live.
  • Personal Injury Protection (PIP): This coverage is similar to medical payments, but also covers lost wages and the cost of hiring someone to do household chores when you or a passenger can't do them. It is often required in healthy states, may be optional, or, like medical payments, may not be available depending on where you live.
  • Gap Insurance: If you've borrowed or leased your vehicle, this coverage pays the difference between your loan amount and the depreciation value of your car when it is added up.

When comparing car insurance quotes, you probably want to make sure that you have requested the same types and coverage levels from each company. This makes it easier for you to see which company can offer a lower premium for the coverage you need.

How Much Car Insurance Do I Need?

How much car insurance you need depends on your individual needs. You must have at least the minimum required types and limits of insurance in your state to legally drive. Most car insurance experts, however, recommend getting higher liability limits even if you opt for liability-only insurance. State minimum limits are often very low and can lead to high expenses if you cause an accident and the damage exceeds your insurance limit.

If you have a loan or a lease on your car, your financial institution will likely require you to take out comprehensive insurance. Even if you own your entire car, you should still consider taking out fully comprehensive insurance, especially if your vehicle is newer, relatively expensive, or if you don't have the means to repair or replace it yourself after an accident.

How to Compare Car Insurance Tariffs

When you buy car insurance, you have probably heard that you should compare car insurance quotes. Average tariffs vary between different insurance companies, so when shopping you can find a policy that suits your needs, even if you are looking for the cheapest auto insurance. But what are you looking for? How should you compare car insurance quotes? How do you know if you are getting a good deal?

Factors Affecting Car Insurance Rates

Your car insurance premium doesn't just depend on which company you choose. There are numerous other factors that can affect how much you pay for auto insurance, including:

  • Age: Your age has a large impact on your car insurance premium, with teenagers paying the most. For this reason, parents may find it beneficial to have teenagers insured rather than having their teenagers their own policy. Between the ages of 20 and 30, car insurance rates begin to decline. However, from around the age of 70, the rates can rise again slightly.

  • Gender: Men tend to pay higher rates than women because they are more likely to get into more accidents and more serious accidents. California, Hawaii, Massachusetts, Michigan, Montana, North Carolina, and Pennsylvania do not allow insurance companies to use gender as a factor in calculating your premium.
  • Vehicle Type: The vehicle you drive is another important factor when it comes to how much you pay. Some vehicles are cheaper to insure than others.
  • Creditworthiness: It may come as a surprise, but your creditworthiness can have an impact on your car insurance premium. Drivers with low credit scores tend to find more claims than drivers with higher scores, and therefore insurance companies charge higher premiums to offset the increased risk. Not all states allow the use of credit as a factor in determining your tariff.
  • Driver's License: If you have accidents, tickets, or DUI convictions on your file, you're likely paying more for insurance.
  • Insurance history: Drivers with ongoing insurance generally pay less than drivers with no insurance coverage or no insurance history.
  • Coverage: The coverage and coverage level you have selected increases or decreases your premium. In general, higher tiers and more optional covers cost more.
  • Discounts: If you are eligible for one or more car insurance discounts, you may be able to lower your premium.

You can also save money on auto insurance if you are
married. And if you're a military or veteran, you can find special discounts or cheaper insurance options.

Car insurance rates by company

Perhaps the first thing you should decide when purchasing auto insurance is which company to get quotes from. Different companies have different methods of evaluating policies, so prices may vary even for the same coverage. First of all, you should consider which factors are most important to you. Are you looking for the lowest possible price or specific policy features like a mobile app or high customer satisfaction scores? When deciding what to expect from an insurance company, you may be able to narrow down which companies to turn to for quotes.

* Overall status affected by limited data availability

Car insurance tariffs by state

In addition to the above factors, one of the biggest effects on your car insurance premium is the state you live in. Your state's minimum insurance laws, the likelihood of an accident, the average accident severity, and the percentage of uninsured motorists can all affect the average cost of car insurance in your state.

Car insurance tariffs by age

In most states, your age plays an important role in the cost of your car insurance. Younger drivers tend to be viewed by insurance companies as a higher risk with a higher probability of accidents than older drivers. If you manage to keep a clean driving log, your car insurance premiums will typically go down in your early 20s, although they can go up again in your older years.

Age Average annual fully comprehensive premium for men Average annual fully comprehensive premium for women
16 years old * $ 2,783 $ 2,280
17 years old * $ 2,485 $ 2,015
18 years old $ 5,727 $ 4,983
19 year old $ 4,434 $ 3,831
twenty years old $ 4,097 $ 3,491
21 years old $ 3,149 $ 2,787
22 years old $ 2,828 $ 2,495
23 years old $ 2,675 $ 2,394
24 year old $ 2,535 $ 2,282
25 years old $ 2,181 $ 2,036
30 years old $ 1,869 $ 1,832
35 years old $ 1,813 $ 1,790
40 years old $ 1,648 $ 1,701
50 years old $ 1,463 $ 1,439
60 years old $ 1,421 $ 1,389
70 years old $ 1,564 $ 1,505

* The premium for 16 and 17 year olds reflects the increase in insurance if the teenager is added to a parent's policy.

frequently asked Questions

    • How do auto insurance claims work?

      It depends on the situation. If you hit another vehicle or damage someone else's property, you will likely need to file a claim with your car insurance company, which can usually be done in an app, online, or over the phone. A claims adjuster assesses the damage, takes explanations from you and the other party or parties involved, and transfers payments if necessary. If you are hit by another vehicle, you can have your damage covered by their liability insurance. If they are not insured or not sufficiently insured to pay for your damage, you can take out your uninsured or underinsured motorist insurance.

    • What if I don't take out car insurance?

      In the vast majority of states, driving without auto insurance is illegal. You must acquire at least the minimum types and levels required by your state; Failure to do so could result in a fine and your license suspended. If you cause an accident and you do not have insurance, you are personally responsible for the damage and injury you cause. Even if your budget is tight, getting auto insurance is an important step in your financial planning. If your bill is too high, you may be able to lower your premium by taking advantage of discounts, shopping and evaluating your insurance coverage.

    • What is flawless insurance?

      “Flawless Insurance” refers to Personal Injury Protection (PIP), which is required coverage in flawless states. This insurance covers your injuries and the injuries of all passengers that you have in your car after an accident, regardless of their fault. PIP may pay for other qualifying expenses as well. But fault is still a factor in car accidents, even in a faultless condition. You are always paying for the physical harm you cause to another party, and you may still be responsible for medical payments for the other party even after they have used their PIP coverage.

methodology

Bankrate uses Quadrant Information Services to analyze 2021 rates for all zip codes and airlines in all 50 states and Washington, DC Coverage Limits:

  • $ 100,000 liability per person
  • $ 300,000 liability per accident
  • $ 50,000 property damage liability per accident
  • $ 100,000 in personal injury to motorists per person
  • $ 300,000 personal injury to an uninsured driver per accident
  • $ 500 deductible in case of collision
  • $ 500 deductible

In order to set the minimum coverage limits, Bankrate has used a minimum coverage that meets the requirements of each country. Our Basic Profile drivers own a 2019 Toyota Camry, commute five days a week, and drive 12,000 miles a year. These are sample rates and should only be used for comparison purposes.
Incident: The rates were calculated by evaluating our base profile using the following incidents: clean record (base), fault accident, single speeding ticket, single DUI conviction, and expiry of cover.

Age: The prices were calculated by evaluating our basic profile with the age groups 18-60 (basis: 40 years). Depending on their age, drivers can be renters or homeowners.

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