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Car Insurance Quotes

Learn about the factors that can influence the amount of a car insurance quote.

A car insurance quote will vary depending on the driver's age, gender, driving record and type of car. [©Shutterstock 2010]
©Shutterstock 2010
A car insurance quote will vary depending on the driver's age, gender, driving record and type of car.

Soliciting car insurance quotes from several carriers can save money and allow consumers to tailor insurance policies to their specific needs. According to Insure.com, all states but New Hampshire and Wisconsin require drivers to have car insurance with a specific amount of minimum coverage. While car insurance is not mandatory in those two states, drivers who opt out of insurance coverage must possess adequate assets to cover any damages that might be sustained in an accident.

When obtaining car insurance quotes, consumers should be sure to ask about no-fault insurance, comprehensive and collision coverage, liability limits, deductibles and discounts.

The Basics of Car Insurance

All car insurance quotes must include:

  • liability coverage against bodily injury and property damage
  • personal injury protection or payment of medical expenses for the driver and passengers
  • collision and comprehensive coverage
  • uninsured/underinsured coverage for motorists

A driver's legal residence determines which of these elements are mandatory and which are optional.

No-Fault Car Insurance

Certain states require drivers to hold "no-fault" insurance coverage. This type of insurance covers medical expenses for anybody injured by a motor vehicle accident in which the policy holder is involved, regardless of who was in the wrong. The purpose of no-fault laws is to lower the incidence of insurance fraud.

Liability Coverage

Each state sets its own minimum liability requirements, which cover any damage sustained by a vehicle - whether it be to an individual or to property - and any resultant legal fees. Lost wages, repair or replacement costs for property damage and "pain and suffering" are also included in the bodily injury coverage.

Car insurance quotes list an insurer's liability coverage limits using three numbers. For example, 20/40/10 means that policy pays out $20,000 in bodily injury for each individual, $40,000 per accident and $10,000 in property damage per accident. While each state dictates a minimum level of insurance coverage drivers must hold, this amount is often insufficient to cover the actual cost in the event of an accident. The Insurance Information Institute suggests drivers carry $100,000 of bodily injury protection and $300,000 for each accident.

Medical Payments and Personal Injury Protection (PIP)

Car insurance quotes include medical payment coverage, known as MedPay. This coverage takes care of any medical fees for the driver and passengers following a collision. Generally, MedPay reimburses medical expenses in three circumstances:

  • the driver is driving his or her own vehicle
  • the driver is driving another person's vehicle and is authorized to do so
  • the driver or members of the family are injured by a vehicle while walking

MedPay dispenses payments regardless of who is at fault. In cases where someone other than the insured is responsible for the accident, an insurance company may seek damages from the party at fault.

Sixteen states require personal injury protection (PIP) coverage for drivers, which includes medical fees and lost wages for the driver and vehicle passengers in the event of an accident. PIP coverage will also pay for funeral expenses.

Collision/Comprehensive Coverage and Deductibles

The collision section of a car insurance policy covers vehicle repair costs to the driver's vehicle in the event that the driver is responsible for the accident. An automobile is classified as "totaled" when the repair costs are greater than a predetermined percentage of the car's value. Insurance companies have totaled vehicles towed to junkyards and offer the insured the car's Kelly Blue Book value.
Any damages a vehicle incurs that are not the result of an accident are paid for by an insurance policy's comprehensive coverage. This includes acts of vandalism or theft, natural disasters or cracks in the windshield..

A deductible is the out-of-pocket amount policyholders must pay before their insurance begins to assume the costs. Increasing a policy's deductible will lower the monthly premiums for the policy holder. For example, raising the deductible on collision/comprehensive coverage from $250 to $500 lowers a premium upwards of 30 percent.

Uninsured and Underinsured Motorist Coverage

Car insurance quotes should include coverage against uninsured motorists (UM). Required in most states, this coverage takes effect if a driver is hit by an uninsured motorist or if the driver is a victim of a hit-and-run.

Drivers who hold underinsured motorist coverage (UIM) benefit if they are involved in an accident caused by a person who has insufficient insurance coverage to handle any medical expenses. UIM coverage will supplement the amount the underinsured individual is able to pay in the event of an accident.

Car Insurance Discounts

Drivers accruing less than a set amount of miles annually (predetermined by the insurance company) may be entitled to an insurance discount. There may also be discounts for drivers meeting certain criteria, including:

  • carpoolers
  • owners of vehicles with certain safety features such as air bags, car alarms and antilock brakes 
  • good driving records
  • taking a driver safety course 
  • being a customer in good standing

Discounts are sometimes offered when multiple vehicles are insured with one company or when a policy is purchased through an employer or large organization.

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