Auto Insurance protects you against financial loss if you have an accident. It is a contract between you and the insurance
company. You agree to pay the premium and the insurance company agrees to pay
your losses as defined in your policy.
Auto insurance provides property,
liability and medical coverage:
- Property coverage pays for damage to or theft of your car.
- Liability coverage pays for your legal responsibility to others for bodily
injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and
sometimes lost wages and funeral expenses.
An auto insurance policy is comprised of six different kinds of coverage.
Most states require you to buy some, but not all, of these coverages. If you're
financing a car, your lender may also have requirements.
Most auto
policies are for six months or a year. Your insurance company should notify you
by mail when it's time to renew the policy and to pay your
premium.
Why do you need auto insurance?
It's really
all about protecting yourself financially.
- If you're in an accident or your car is stolen, it costs money, often a lot
of money, to fix or replace it.
- If you or any passengers are injured in an accident, medical costs can be
extremely expensive.
- If you or your car is responsible for damage or injury to others, you may be
sued for much more than you're worth.
- Not only is having insurance a prudent financial decision, many states
require you to have at least some coverage.
Questions to ask your agent
Your Independent Agent is an
advocate for finding auto insurance that meets your specific needs. Here are a
few things to consider as you prepare for the discussion:
- How much can you afford to pay if you get in an accident? (To keep premiums
low you may want to have a higher deductible and be willing to pay more for
repairs.)
- What is the insurance company's level of service and ability to pay claims?
- What discounts are available? (Ask about good driver, multiple policy and
student discounts.)
- What's the procedure for filing and settling a claim? (Ask who to call and
what happens after you file a claim.)