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Car insurance FAQ

Why car insurance is mandatory?

Car insurance is mandatory in most states of the US, whereas in some of them you won't be able to register your car without providing a valid policy. The mandatory status of car insurance is explained by the liability arising from driving a vehicle and associated costs in case of an accident. The average repair and medical costs caused by an auto accident are higher than the average person can afford. So in order to make it possible to eliminate any liability car insurance was imposed as a legal requirements since it makes it possible to cover any costs due to mishaps on the road.

What my policy should include?

The only type of coverage that a policy is legally required to carry is the third party liability coverage, which includes bodily injury and property damage coverage. All other coverage types are optional and you are free to include and exclude them as you like. However, if you're financing your car through a loan it's very likely that the lending institution will also require you to include collision and comprehensive coverage to your policy, which will boost up your premiums but will also provide additional coverage protection.

What will affect my rates?

There are different factors that will affect your rates, some of them being evident and others mysterious to the average customer. Yet all these factors are taken in consideration because they all help the car insurance provider to asses the risk with each driver. The following factors will determine your rates to a different extent: car make and model, engine volume, top speed, theft rates, repair costs, safety features, driver's credit rating, driving record, place of residence, marital status, education and others. Each company uses different formulas using these factors so the result will always be different.

How do I get lower rates?

There are several ways you can lower your current car insurance rates. First of all you can exclude different types of coverage and lower your amounts but this is quite dangerous since you risk becoming short of necessary coverage when it will be needed. You can also opt for different discounts that most providers offer but you should make sure that you are eligible for any of them. It's always better to ask around first. And don't forget to shop around when purchasing a new policy or renewing your current one. By comparing car insurance quotes you will always be able to get a more competitive deal from a different provider.