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Looking for an auto insurance guide that makes sense?

You already know you need auto insurance. Now, you’ve got the ultimate auto insurance guide to help you find out the facts. The experts at Cheap Insurance have put together the most important answers to all the biggest auto insurance questions. Once you read this, you can choose auto insurance with confidence. 

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What is Auto Insurance?

meaning of Auto Insurance

An auto insurance policy is a promise by an insurance company to provide funds for you to pay for covered costs in the event of an accident. You get protection in exchange for a monthly payment (the premium). In some cases, there is an amount you must pay toward accident expenses before coverage kicks in (the deductible).

The main purpose of auto insurance is to ensure that people harmed in an accident have the resources they need to manage their medical care and vehicle repair or replacement bills – without having to sue the other driver. If your auto insurance covers the whole cost of an accident, you usually won’t have to worry about going to court.

It’s essential to remember that when you buy auto insurance, you are typically protecting the other person on the road. Your insurance pays for damages (covered costs) after an accident you are found responsible for causing. If another driver is found responsible, then his or her insurance covers the costs.

There are some variations on this. For example, some states are “no fault” auto insurance states. These states let you draw on your own Personal Injury Protection (PIP) insurance coverage right away so you can pay for your medical care no matter who was at fault. But other states do not use PIP at all.

Do I Need Auto Insurance?

If you drive, you need insurance!

Most states do not allow you to even register a vehicle unless you have current auto insurance. And more states are getting wise to the ways people try to drive without auto insurance: They now have automated systems that alert them immediately when an insurance policy lapses or gets cancelled. 

Some states will allow you to freeze your policy temporarily if you can demonstrate that you will not be driving for at least a full month. In general, though, the only way you can stop paying for auto insurance is if you stop driving. Many states will send you a notice demanding proof of insurance within 30 days of a policy closure.

What Kinds of Auto Insurance Are There?

Kinds of Auto Insurance

There are many, many different kinds of auto insurance!

Luckily, there are only two types you absolutely need to know about – Bodily Injury Liability and Property Damage Liability. These are incorporated into any basic auto insurance policy. They pay for medical expenses and vehicle repair or replacement costs after an accident, respectively.

An auto insurance guide that described every possible kind of auto insurance would be as thick as a phone book. But there are a few other common types to be aware of. Most of them are optional, but a few states have their own standards requiring specialized auto insurance coverage. 

Common auto insurance types include:

  • Uninsured Motorist: This policy covers costs if the other driver has no insurance whatsoever
  • Underinsured Motorist: This “gap” coverage kicks in when the other driver’s policy is insufficient
  • Collision: This generally covers collisions with stationary objects such as trees and power poles
  • Comprehensive: This covers damage from adverse weather events and crime (theft, vandalism)
Talk to your auto insurance company for details on what you might need. Some states require Uninsured or Underinsured Motorist coverage – which may be two separate policies or may be consolidated under just one.

There are many, many different kinds of auto insurance!

Luckily, there are only two types you absolutely need to know about – Bodily Injury Liability and Property Damage Liability. These are incorporated into any basic auto insurance policy. They pay for medical expenses and vehicle repair or replacement costs after an accident, respectively.

An auto insurance guide that described every possible kind of auto insurance would be as thick as a phone book. But there are a few other common types to be aware of. Most of them are optional, but a few states have their own standards requiring specialized auto insurance coverage. 

Common auto insurance types include:

  • Uninsured Motorist: This policy covers costs if the other driver has no insurance whatsoever
  • Underinsured Motorist: This “gap” coverage kicks in when the other driver’s policy is insufficient
  • Collision: This generally covers collisions with stationary objects such as trees and power poles
  • Comprehensive: This covers damage from adverse weather events and crime (theft, vandalism)
 

Talk to your auto insurance company for details on what you might need. Some states require Uninsured or Underinsured Motorist coverage – which may be two separate policies or may be consolidated under just one.

What Happens if I Don’t Have Auto Insurance?

Driving without insurance is illegal. Penalties vary, but your vehicle registration and driver’s license will usually be suspended. You’ll have to pay hefty fines to reinstate your registration, and you’ll still need to show proof of insurance before you can drive. Plus, your auto insurance premiums will go up. 

You may even be ordered by a court to hold a pricey SR-22 auto insurance endorsement. This designates “high risk” drivers and can be twice as expensive as a standard auto insurance policy, even though it does not provide you with any additional protection.

How Can I Get the Best Deal on Auto Insurance?

No auto insurance guide would be complete without saying a few words about saving money on auto insurance!

It’s crucial to get an affordable auto insurance deal so you save money for years to come. The best way is to compare auto insurance quotes online. With Cheap Insurance, you can compare auto insurance quotes from top insurers in your state.

You can get started right now or contact us for more information.