First and foremost, car insurance is extremely necessary in America, and you cannot drive a car in America without proof of insurance. It is important to know that traffic police in the United States do not tolerate this matter at all. You will always find them patrolling and monitoring vehicles, and if they happen to stop your car for any reason, they will immediately ask you for the vehicle documents. If they discover that your car is uninsured or that you have not insured it, they will impound your car on the spot and it will cost you a very hefty fine to retrieve and insure it again.
- In order to drive a car in America, you must fulfill three requirements:
Driver's License: You need to have a valid driver's license.
Vehicle Registration: Your car must be properly registered with the relevant authorities.
Car Insurance: You must have insurance coverage for your car.
These three conditions are essential and must be met in order to legally operate a vehicle in the United States.
The most important aspect of car insurance, which is our topic today, is the price or cost of insurance, as it varies depending on the country, car type, and also the insurance company. Additionally, there are other factors that affect the insurance price:
Driving history in America: The longer you have been driving in America, the lower the insurance price tends to be, and vice versa.
Car type: Whether the car is a 4-cylinder, 6-cylinder, or 8-cylinder model. The larger the cylinder, the faster the car, and therefore, the higher the likelihood of accidents, resulting in higher insurance rates.
Age: According to U.S. law, individuals under the age of 30 pay higher car insurance premiums compared to those over 30. This is because younger individuals are often perceived as more reckless drivers.
Date of acquiring the car: The older the car, the lower the insurance price. For example, a car manufactured in 2007 would have a better insurance rate than a car from 2014 and so on.
- Types of car insurance in America:
I. Liability Insurance (Single Party Coverage):
This type of coverage provides partial insurance for the car of the person you collide with. If you cause an accident and hit another person's car or hit a pedestrian, the costs of compensation that you are required to provide to the injured party will be covered by the entity that insures your car. However, if someone else hits or collides with you, this type of insurance does not provide any compensation in that case.
II. Full Coverage Insurance (Dual Party Coverage):
This refers to comprehensive coverage. In this type, both you and the person involved in the accident (meaning you and the victim) will be insured. Here, the insurance premium will be higher compared to the first type.
Now that you are familiar with the types of insurance, you can choose the type that suits you based on costs and the condition and type of your car. To insure your car, simply go to any car insurance company and request car insurance. They will provide you with a form to fill out according to your preferences. Congratulations, your car is now insured!"
- These are some of the most popular auto insurance companies in the United States:
- State Farm: www.statefarm.com
- Progressive: www.progressive.com
- SafeAuto: www.safeauto.com
- GEICO: www.geico.com
- AAA: www.aaa.com
- Allstate: www.allstate.com
- Explanation of some terms and phrases you may encounter while filling out a car insurance form:
Loss Damage Waiver (LDW): It refers to relinquishing responsibility in the event of a total loss of the car due to an accident.
Personal Accident Insurance (PAI): Insurance coverage for accidents or personal injuries.
Personal Effects Protection (PEP): Insurance coverage for personal belongings inside the car.
Additional Liability Insurance (ALI): Additional coverage for liability on top of the basic insurance.
Supplemental Liability Insurance (SLI): Additional liability coverage related to authorizing other drivers for the car.
Emergency Sickness Program (ESP): Insurance program for emergency sickness or fatigue.
Liability Insurance Supplement: Additional liability coverage on top of the basic insurance.
Collision Damage Waiver (CDW): Waiving the responsibility in the event of a collision.
Bodily Injury Liability: Coverage for bodily injuries that provides financial and legal protection in case of injuring or causing the death of another person while driving your car. The coverage amount is represented by a range of values, starting from $5,000 to $500,000. The higher the coverage, the higher the premium you will pay to the insurance company. This applies to the types of coverage listed below, with slight variations in the minimum and maximum amounts.
Medical Payments, No-Fault or Personal Injury: Coverage for medical expenses of injured passengers and the driver in case of an accident, as well as for your own injuries as a pedestrian.
Uninsured Motorists Coverage: Insurance coverage for your car in case of a collision with an uninsured vehicle. This situation applies to accidents where the other party flees the scene, considering them as an uninsured or underinsured driver.
Comprehensive Physical Damage: Coverage for repairing your car in case of damages caused by incidents other than collisions, such as theft, fire, floods, falling objects, etc.
Collision Coverage: Financial and legal coverage in the event of a collision, whether with another object or another car, whether it is your fault or the fault of the other driver. However, it is advisable to cancel this coverage for very old cars.
Property Damage Liability: When you damage someone else's property or another vehicle, and the fault is yours, this type of coverage protects you legally and covers the fees and repairs.
- In addition to the aforementioned coverage types, there are other services that insurance companies can offer you to add to the list. Among these services, we can mention:
Emergency Road Service:
This service provides assistance if your car experiences mechanical breakdown on the road.
If your car is disabled or undergoing repairs after an accident, subscribing to this service will grant you a complimentary rental car until your vehicle is repaired.
Mechanical Breakdown Insurance:
This coverage protects against mechanical failures of the vehicle.
There are also other terms related to car insurance that you may come across. Some of these terms include:
It refers to the amount you will pay out of pocket. For example, if you purchase a specific coverage, such as Collision coverage with a limit of $25,000 per accident, and you choose a $500 deductible, it means that the insurance company will pay up to $25,000 for damages resulting from the collision, and you will contribute $500 towards the repair costs. Choosing a higher deductible will result in lower insurance premiums, and vice versa.
Please note that insurance terminology may vary slightly between different insurance companies or regions. It is always advisable to carefully review the terms and conditions of your specific insurance policy and consult with your insurance provider for further clarification.
- Here are some tips and guidelines for insuring your car:
- When obtaining insurance, try to pay for a full year or at least six months upfront. It is better than paying monthly. For example, the insurance costs for paying annually may amount to only $700, whereas if you choose to pay monthly, it could be $850 to $900!
- Be cautious about consuming alcohol while driving, as the penalties can be severe. You may face hefty fines, imprisonment, and your insurance may be revoked. Additionally, your vehicle could be impounded. It's best to avoid these complications altogether.
- Research and compare insurance companies to find the most affordable one in your state of residence. Utilize online resources to find quotes and select the offer that suits you best.
- Remember to comply with local laws and regulations regarding car insurance, and always drive responsibly.