Car Insurance Reviews
How Much Is Car Insurance?
We found that the average annual premium for car insurance is $2,265.37, based on the eight companies reviewed in our Best Car Insurance Companies roundup. The cost of car insurance varies greatly depending upon the company you use, the amount of coverage you need, the state you live in, and personal factors, including your age, the age of your car, your habits, your driving history, and more. It makes sense to shop around to find the best deal for your specific situation.
How Much Car Insurance Do I Need?
The amount of car insurance you need depends upon a lot of factors, including the type of car you have and your state's minimum coverage requirements. However, as a general rule, you'll need liability, collision, and comprehensive coverage.
Other types of car insurance include:
- Full/limited tort, a type of insurance that can help you save on your premiums if you give up your right to sue in the event of an accident
- Medical payments/injury protection, which will cover medical bills for the policyholder and passengers after an accident
- Uninsured/under-insured motorist protection, which provides medical and property damage coverage if you're involved in an accident with an uninsured or under-insured driver
- Towing, which will cover the cost of towing if your vehicle cannot be driven after an accident
- Glass breakage, which covers broken glass, something most comprehensive and collision policies don't cover
How Can I Lower My Car Insurance Premiums?
There are several ways you can cut your car insurance premiums. You can:
- Take advantage of multiple car discounts
- Be a safe driver
- Take a defensive driving course
- Shop around for the best car insurance rates
- Purchase a smaller vehicle
- Increase your deductible
- Get rid of coverages you might not need
- Take advantage of discounts
- Install anti-theft devices
What Is an Insurance Deductible?
A deductible in the insurance realm refers to the amount of money a policyholder must pay out of pocket for damages before their insurance policy kicks in to provide coverage. As a general rule, the higher your deductible, the lower your premium. But given circumstances, including driver experience, a higher deductible might not always be the smartest move. If you're a safe driver, a higher deductible makes sense because you're less likely to have an accident, so that higher deductible is a smart way to save on your premiums.
Can I Get Car Insurance Without a License?
The short answer is yes. If you own a car, you'll need to insure it, even if you're not the one driving. Most car insurers, however, ask for a driver's license number when you apply for coverage. But what if you don't have a license?
You might consider adding a primary or principal driver to your policy. This lets the insurance company know you're not the one behind the wheel. You can even exclude yourself as a driver on the policy.
Some insurers even offer a parked car policy in which your vehicle is protected against acts of vandalism, theft, or accidents when it's parked.
And if your license has been suspended due to a DWI or DUI conviction or a serious accident, you'll still need coverage for your vehicle. In this case, your insurer may need to provide an SR-22 form to prove you have insurance. If your license has been suspended, you may fall into the high-risk driver category, which may make it more difficult and expensive to get car insurance.
What Is the Cheapest Type of Car Insurance?
The cheapest type of insurance is third-party insurance. This type of insurance protects the insured against the claims of a third party. The first party–the policyholder–is responsible for their damages or losses, regardless of the cause. The second party–the insurance company–offers protection against losses caused by a third party, someone who is not the insured. Third-party insurance is a type of liability insurance.
Can An Insurance Company Check Your Driving Record?
Yes. Car insurance providers rely on your driving record to determine whether you pose a greater risk on the road. If you're prone to accidents, it will cost more to insure you. If you're a safe driver, your premiums will be lower.
But you can check up on your own driving record. The Department of Motor Vehicles in your state can provide you with a copy of your driving record, usually for a fee. This record includes:
- Your name and address
- Driver's license number
- License status
- Convictions related to motor vehicle violations
- Accident history
- Driver controls, including failure to yield or failure to stop at an intersection
Comprehensive insurance is a type of car insurance that covers damage to your car from causes other than a collision. For example, if your car is demolished by a tornado or hurricane, your comprehensive insurance would cover the damage.
Collision insurance is a type of auto insurance that reimburses the policyholder for damage sustained to their vehicle due to the fault of the insured driver.
Liability insurance protects the insured party against claims resulting from injuries and damage to other people and property.
An insurance premium is the purchase price of your insurance policy or the monthly payment required to keep the policy in effect.
A deductible on an insurance policy is the amount the policyholder is responsible for paying out of pocket before their insurance kicks in and provides coverage in the event of an accident. The higher your deductible, the lower your premium–or the amount you pay for coverage.
High-Risk Car Insurance
High-risk car insurance refers to a category of auto insurance that covers drivers who have a history of accidents or unsafe driving patterns, a history of driving under the influence (DUI) or driving while intoxicated (DWI), are inexperienced, or is otherwise considered at-risk for a loss.
Underwriting is the process by which an individual or institution takes on a risk for a fee. In the case of auto insurance, an auto insurer takes on the risk of covering a claim in exchange for the annual premium.
Risk in financial terms refers to the chance that an outcome will be different than the expectation. Risk assumes that one may lose all or some of an investment or holding. When it comes to insurance, the insurer accepts the risk that their policyholder may have an accident or experience a loss, thereby requiring the company to pay out on a claim.