Standard Car Insurance Coverage

Essential for anyone looking to protect the investment of their vehicle, insurance is a must. The most common form of insurance is purchased for cars, trucks, and other vehicles and protects the owner against losses due to traffic accidents and liability. In the United States, standard car insurance is required in all states in one form or another. Depending on the state, the penalty for not having automobile insurance can vary, but usually involves a fine, suspension or revocation of driver’s license, or possible jail time. Usually the law requires insurance as a way to protect third parties against the consequences of loss, damage, or injury caused by a vehicle.
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While not all states treat car insurance the same, most require a proof of insurance to be kept in the car at all times. Some don’t require this, but require drivers to have insurance information to exchange with other drivers in the result of an accident. Even in the states that don’t enforce the law of having to carry it with you, it’s always good to keep it on hand in case an officer asks for it. Officers of the law are able to ask for your insurance information at any time.

There are four different types of items that standard car insurance covers.

1. The insured
2. The insured vehicle
3. Third parties involved
4. Third party, fire, and theft

Some areas offer protection for those riding in the vehicle as well as those driving and/or involved in a damaging event. Many companies offer each of these items separately, while some have all inclusive packages. The pricing of car insurance differs depending on where the insurance is bought, the location, and what is covered within the plan. It’s important to research thoroughly which type of plan is best for the protection of your family, self, and vehicle. With so many different options and insurances vendors, many are able to find deals on insurance plans with high coverage provided their driving record is clean.

Each time an insurance company is required to pay for car repair, the policyholder must also pay a portion of the fee known as a deductable. When determining deductibles, the driver responsible for the accident may determine whether or not the deductible is able to be reclaimed. The amount that a person pays over a fixed period of time for their coverage is known as a premium. Many individuals will choose to pay a higher deductable to keep their premiums down, as premiums must be paid in order to keep the coverage whether or not tragedy strikes.

Many different factors are considered when determining premiums. Depending on the location, the premium can be mandated by the government or the insurance company within the constraints of guidelines put in place by the government. Oftentimes, the company will have more flexibility on what to charge for repairs of physical damages than on liability coverage mandated by the government. Gender plays a role in determining standard car insurance premiums, as men tend to drive more miles per year than women. Because of this, men have a higher probability of being involved in a collision meaning that younger male drivers usually pay a higher premium.

By the time a driver reaches a certain age, the premiums even out. Younger drivers are also more likely to get into an accident due to their inexperience on the road and also pay a higher premium than older drivers. Teenagers with no driving record have the highest premium, but are offered discounts if they engage in further drivers training courses. Insurance companies will also offer discounts to those with good academic records or students who live away from home. Insurance premiums also decrease (generally) when a driver hits the age of 25. Other than the main two elements in determining premiums, unmarried individuals, owners of sports cars, muscle cars, motorcycles, and sport utility vehicles are generally charged a higher premium.

The final step in determining the premium for drivers is distance driven. Some companies charge a lower premium for those who drive their car less frequently, have installed GPS systems in their vehicle, or drive a shorter average distance. The newest form of coverage was released in 2008 by The Progressive Corporation and allowed for a customized insurance rate based on how often and where their car is driven.
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