In 2021, the average price of a new car is $41,000. You might think that buying a used car is the better deal – it is – but it’s not like you’ll make big savings. The average price of a new car has been on a steady climb as well.
If you’re in the market for a car, new or used, one thing is clear: you want to protect your investment. To do this, you have to purchase car insurance.
But how much do you know about car insurance? How does it work? What are the different types of car insurance? Must you purchase car insurance anyway?
This article has all the information you’re looking for. Keep reading!
- You’re Legally Required to Purchase Car Insurance
As a driver, you know that anything can happen on the road. You can cause an accident that results in the damage of property, injuries, and even loss of life.
If you reside in an at-fault state, you’ll be liable if you cause damage to another party. If you hit another car, for instance, you’ll be required to compensate the other driver for the repairs they’ll make on their car.
As such, most states require drives to purchase at least a specified amount of liability coverage. If you cause damage that exceeds your liability coverage, you will be forced to dig into your pockets.
- Liability Coverage Isn’t the Only Coverage You Need
Some drivers only buy liability coverage because it’s a legal requirement. This is a big mistake since you and your car are also exposed to accidents.
Let’s say you’re involved in a collision. Your liability coverage will take care of the other party if you’re at fault, but what about your car?
This is where collision coverage comes in. Regardless of who’s at fault, collision coverage will repair your car.
Comprehensive insurance is also another type of car insurance you ought to have. It repairs or replaces your car if it’s involved in an event that’s not a collision. For example, if your car is stolen or vandalized, your comprehensive policy takes care of your losses.
When you have liability coverage, collision insurance, and comprehensive insurance, you’re said to have full coverage insurance.
However, depending on specific laws in your state, you might need additional insurance policies. If you live in Illinois, for example, and you’ve been convicted of driving without insurance, you’ll need to buy SR22 insurance.
Wondering how to check my SR22 status? Use this resource.
- Many Factors Affect Your Car Insurance Premiums
What you pay for car insurance annually is different from what another driver pays. This is because there are several factors that can influence the cost of insurance. These include your car, age, driving record, gender, and the state you live in.
Also, it helps to shop around when you’re buying car insurance. Rates can vary widely from insurer to insurer.
Make Use of This Car Insurance Guide
Car insurance is a must-have when you own a car. However, there’s much to know about this insurance, especially if you want to get a good deal when shopping for coverage. Put the information in this guide to use.
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