What is Car Insurance?

Be Prepared in Case of an Accident

Driving always comes with some level of risk. While no driver plans on being in an auto accident, there are thousands of accidents every day. Most drivers will be in at least one accident during their lifetime. Car insurance doesn’t prevent accidents, but it helps financially protect drivers who are responsible for them.

Car insurance offers coverage for many of the risks that come with owning and operating a motor vehicle. Policies may provide protection from a variety of incidents, including anything from a break-in to a multi-car accident, depending on the exact coverages they have.

Who Needs Auto Insurance?

In most states, drivers who operate vehicles on public roads must maintain at least the state’s minimum levels of auto coverage. Drivers who fail to do may not be able to register their vehicle, and they might face legal consequences if they’re pulled over or in an accident.

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What Auto Insurance Coverages Are Available?

Auto policies can include several different coverages. A few coverages that are available through most policies as either standard or optional protections include:

  • Personal Injury Protection (PIP), which might cover injuries that a driver or their passengers sustain during an accident
  • Bodily Injury Liability, which may cover injuries that people outside of a driver’s vehicle sustain during an accident
  • Comprehensive and Collision Coverage, which usually cover a driver’s vehicles in a variety of situations
  • Property Damage Liability Coverage, which may cover damage that a driver causes to other people’s property
  • Underinsured and Uninsured Motorist Coverage, which might cover accidents that are caused by other drivers who aren’t adequately insured

Along with these common coverages, some insurance companies also offer emergency roadside assistance, rental coverage, or other protections as optional add-ons.

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How Much Auto Insurance Coverage Should Drivers Carry?

While drivers are generally required to carry at least their state’s minimum levels of auto insurance, many drivers want more protection than their state’s laws require. States’ legal minimums for auto insurance often leave drivers still exposed to potential risks.

To determine precisely how much additional coverage they should purchase so they’re properly protected, drivers should talk with an insurance agent. The exact amount of coverage drivers ought to have varies from situation to situation.

What Factors Do Insurance Companies Consider When Calculating Auto Premiums?

Insurance companies consider many different factors when they’re underwriting auto policies. Some factors that often may affect a driver’s auto premiums are:

  • The driver’s age, gender, and marital status
  • The driver’s driving record
  • The driver’s credit score (except in Massachusetts, Hawaii, and California)
  • The make and model of vehicle being insured
  • Where the insured vehicle is stored when not in use
  • What coverages and limits the driver selects

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Do Auto Policies Cover Rental Vehicles?

Some of the coverages that auto policies include may extend to vehicles the insured driver rents. What coverages extend to rental vehicles and when they extend to rental vehicles can vary, though. To find out whether their policy provides coverage for rented vehicles, drivers should contact their insurance agent.

How Can Drivers Get Quotes for Car Insurance?

Reviewing auto quotes involves a lot more than simply comparing premiums. It’s also necessary to carefully check each policy’s coverages, terms, conditions, and exclusions.

A car insurance agent makes this process simple. In just a few minutes, they can request quotes from several insurers who offer policies in the state. Then, they can sit down with a driver to go over the differences between each quoted policy. After reviewing costs and coverages, drivers can feel confident that the policy they choose is affordable and offers good protection.


Meet Your Industry Specialist

Jim Hickey

Mr. Hickey is a Partner and the President of Personal Lines. He was the President of Links Insurance Services, which he started in 2001. Jim grew Links Insurance to 40 employees by the time it became a division of World Insurance Associates in 2019.

Jim Hickey has been a top commercial and personal lines producer for the past 15 years and has guided the company to 18 years of year-over-year growth.

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