Car insurance is protection against damage to you, your car, another person, or another car in the event of an accident. Before you purchase a policy you should know how your car insurance protects you, and what types of coverage are available so you can decide what level of protection you want out of your policy. What Does Car Insurance Cover? Car insurance policies differ based on your insurance provider, and the type of coverage that you'd like to have. All policies have some form of liability insurance, and will include collision & comprehensive insurance coverage if you want. The liability section of your auto policy pays in the event you are found at fault or liable for causing an accident. This section has limits of insurance stating how much will be paid out for any damage of property or bodily injury. Make sure you satisfy your state's minimum liability coverage requirements Comprehensive covers anything that is not collision related. Fire, theft, windshield breakage are all examples of items that would be covered under this type coverage. Collision coverage provides coverage for any damage that is caused by the car colliding with something else---another car, rock in the road, fence, etc. Your policy should fit your needs, and can include a variety of other coverage types beyond the basic ones explained above. When getting car insurance quotes, be sure to go over all the available coverage plans and build a policy that works for you. Do I Need Car Insurance? Almost every state requires some minimum car insurance coverage on any registered vehicle. The penalty for not doing so can be costly and include fines and loss of your drivers license. Even if your state does not require auto insurance, all states require you to prove fiscal responsibility. Fiscal Responsibility requires anyone without auto insurance to provide proof that they can pay for an accident that they are found liable for causing. States require you to show adequate proof of assets either in personal funds or surety bonds. Because it is the law, almost everyone can obtain auto insurance. Even if you have a driving record that is less than perfect, there are high risk insurance policies that will provide you coverage. What Happens If I Drive Without Auto Insurance? Driving without auto insurance can be a costly decision. If you are caught without auto insurance the penalty can range from a ticket and a nominal fine to up to a year in jail depending on the state and your driving history. If your license is suspended, you may be require to fill out and submit a SR-22 form. This form is filed by your insurance company with your local Department of Motor Vehicles (DMV) proving that you are complying with the requirements to carry car insurance. Failure to file this form, do to a lapse in your coverage for any reason, could result in your license being suspended as well as high fines. TIP: Make sure that your policy is paid at every renewal and maintain an up to date insurance card in your vehicle all times. This will give the necessary proof of insurance should there be any questions. What is Assigned Risk Auto Insurance? Assigned risk policies are designed to cover individuals that find it hard to obtain insurance due to a less than perfect driving record. States require that a certain number of carriers cover drivers that find it hard to get insurance by offering assigned risk policies. These policies must carry the minimum liability limits set by that state, however, an assigned risk policy can cost more than double the rate of a regular policy. If you have a bad driving history and think you need an assigned risk policy, call several carriers to find one. You must be up front about any tickets, accidents, DUI arrests, or other issues that will show up on your driving record. They can let you know if they are able to provide you insurance or they can possibly refer you to an assign risk carrier. TIP: If you ever find yourself on an assigned risk policy, don't fret. Usually after your tickets have fallen off (2-3 years and in the case of a DUI, it could take up to 5-7 years) and with continuous insurance coverage, you can begin obtaining quotes from carriers for cheaper car insurance. Improving your driving record is the key! Car insurance is something that every driver will need to get. What type of coverage, and how much insurance you want is entirely up to you.
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