Monthly insurance premiums represent one of the biggest costs associated with owning a car. Depending on the driver’s age, driving history, type of coverage and the state in which he or she resides, premiums can vary from around $50 per month to well over $200.
Almost all states today require licensed drivers to carry a certain minimum state-prescribed insurance coverage on their vehicles. Some states are more stringent than others and insist on drivers getting automobile coverage before they can register their vehicles or renew their license plates annually. Others require drivers to show proof of coverage when they get into accidents. Failure to comply with mandated driver’s license requirements can result in fines and license suspensions. The only two states where automobile insurance is not currently mandatory are New Hampshire and Wisconsin.
Car liability insurance coverage is designed to protect individuals from the financial consequences of a vehicular accident. The coverage typically pays for the costs associated with repairing or replacing a damaged vehicle and for medical expenses involved in treating those injured in a crash. States mandate that all drivers carry such insurance so that those who are not at fault in an accident do not end up paying for the consequences stemming from one. Automobile liability insurance also helps protect individuals from accidents involving under-insured or non-insured individuals. Car insurance full coverage is usually available in renewable, six-month to one-year terms. Consumers typically have the option of paying the premiums on a monthly basis or in a lump-sum.
State-required automobile insurance covers different kinds of liability. The two major types of car insurance coverage that states require individuals to purchase are Bodily Injury liability and Property Damage liability. Bodily injury insurance covers injury or death to other people for an accident in which you are found to be primarily responsible. It’s important to note that bodily injury coverage does not cover you. It only covers the driver and passengers of the other vehicle. Property damage insurance meanwhile pays for damage to someone else’ car or property caused by an accident for which you are primarily responsible.
Different states have different mandatory requirements for bodily injury and property damage coverage. The state commissioner of insurance for each state determines the minimum amount of bodily injury and personal damage coverage that drivers are required to purchase. A majority of states require drivers to purchase insurance coverage of at least $20,000 to $25,000 for each person injured in a crash with a limit of $50,000. Some states such as Florida require just $10,000 in bodily injury coverage with a maximum limit of $20,000.
Meanwhile the prescribed minimum for property damage coverage varies from $5,000 in states such as Massachusetts and Delaware to $25,000 in states such as New Hampshire and South Dakota.
In addition to bodily injury and property damage coverage another sort of car insurance choice that is available is called Comprehensive Auto Insurance. Comprehensive insurance protects the owner of a car against not just collision-related expenses but also from expenses that might stem from accidental damage to a vehicle. It provides coverage if a car gets stolen, is vandalized or gets damaged or destroyed in a natural disaster. In many cases, comprehensive coverage also pays for any accident-related damage or bodily injury to the owner of that policy regardless of who was at fault in the accident.
In choosing insurance coverage an individual needs to make sure that he or she is purchasing enough coverage to protect themselves in an accident. The insurance coverage mandated by most states are barely sufficient to cover expenses in an accident which is one of the reasons why insurance companies often advise individuals to buy more coverage than the prescribed minimums. Drivers also need to be aware that in many cases comprehensive insurance coverage doesn’t cover 100% of the costs involved in replacing a car. Generally speaking the more insurance coverage that is purchased the more the monthly premiums will be. So while it is important for individuals to ensure that they are not under-covered they also need to make sure they are not paying for coverage they don’t need or are unlikely to use.
The amount of money that individuals can expect to pay on monthly car insurance payments depends on a number of factors. Student drivers and those under 25 years of age for instance, usually have much high monthly premiums than most experienced drivers. One of the reasons for this is that younger drivers have been associated with a disproportionately higher rate of accidents than drivers 25 years and older. Drivers with a history of reckless driving, those who have been convicted for driving while intoxicated and those involved in previous accidents can also expect to pay significantly more on car insurance every month compared to drivers with clean records. Conversely, drivers who have a good driving history often can take advantage of numerous safe driver discounts to lower their monthly costs.
Another factor that has an impact on insurance costs is the vehicle model. It’s considerably more expensive for instance to buy comprehensive insurance coverage on brand new vehicles, sports cars and expensive high-end models than it is for less expensive vehicles.
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