A Guide to Auto Insurance for Young Families (And Anyone Else!)

Auto insurance is one of those topics that can cause you to groan a little.

Even though you know it’s something you need to have, it seems too complicated.

The truth is, if you have a young family, older children, you’re single or anywhere in-between, car insurance is something you need to learn about.

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You’re in luck. Here are three questions you probably have –  with the answers you need.

1. What is auto insurance?

To put it most simply, you need a safety net if you were involved in an accident and that’s what your car insurance will provide.

If you have a car accident, you’ll probably end up needing some kind of repair work – if you don’t have to totally replace the vehicle. Your automobile insurance will help to cover those costs, as well as any medical bills that are a result of the incident.

You’ll have the peace of mind that you’re protected, whether you’re at fault or if the other driver involved doesn’t have their own insurance.

2. Why do you need car insurance?

One of the reasons is that it’s illegal to drive without it and you could face stiff fines.

That certainly isn’t the only reason you need to have coverage, though.

Cars are costly and so is medical treatment.

And, unfortunately, accidents do happen, despite your best efforts to prevent them.

The repercussions of experiencing an accident without insurance coverage can be financially devastating.

Most people don’t even consider the threat of lost employment if their vehicle is damaged or totaled and they can’t afford repairs or a replacement.

That’s not all, however.

Consider what your automobile insurance policy will cover.

  • Damages to your car.
  • Injuries to your passengers.
  • Injuries to other drivers.
  • Injuries to the passengers of the other vehicle.
  • Damages to the other driver’s vehicle.
  • Injuries to pedestrians.

3. What kind of coverage options do you have?

While you’re legally bound to have automobile coverage, the amount you’re required to have can vary and each state has their own minimum requirements.

This is where a lot of the confusion surrounding auto insurance comes from, so here’s a breakdown to help you out.

  • Bodily injury liability is required and provides coverage for you if you kill or hurt someone while you’re behind the wheel of your car. It will pay for the injured person’s medical bills, pain and suffering, lost wages and funeral expenses. This type of coverage will also pay for your legal costs if you are sued after the accident.
  • Property damage liability is required, as well. When you cause an accident, you’re held responsible for the damage to the other party’s vehicle. This doesn’t just cover people, but personal property, too.
  • Collision coverage is optional, though if you’re leasing your vehicle or have a loan from the bank, those institutions may require it. Once your deductible has been paid, collision coverage will pay to repair or replace your vehicle – even if the accident is your fault. If you aren’t at fault, your insurance company may try to get you reimbursed by the other driver.
  • Comprehensive is for incidents that aren’t related to an auto accident, such as natural disasters, hitting an animal, a falling object, theft or vandalism. This coverage is optional.
  • Underinsured or uninsured motorist coverage will help with expenses incurred from an accident with someone who isn’t insured or whose insurance is insufficient. It’s an optional policy and there is a cap on how much it will pay, depending on the options you choose.

The bottom line

Automobile insurance is required coverage and the financial repercussions of failing to secure coverage can be catastrophic to a young family.

Remember that you do have options – even within what’s required.

What’s your biggest question about auto insurance?

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