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Which auto makes get in the most fatal accidents?

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What You Should Know about Ridesharing Insurance for Uber and Lyft

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Things to remember...
  • Auto insurance rates are based on a driver’s age or how long they have been driving in the US
  • In most areas, insurance companies will assign high-risk rates to drivers who are under the age of 25
  • It’s typical for male drivers who are between the ages of 16 and 19 to pay the highest premiums out of all drivers
  • If you’re 20 and you already have three to four years of driving experience, you could get a Good Driver Discount
  • It’s often more affordable for young drivers to stay on their parents’ insurance for as long as they can

Twenty-year-old drivers may not be in their teens anymore, but they certainly wouldn’t know it when they get quotes for their own auto insurance policies. Auto insurance is one of the fee things that you’ll buy in life that has an age-based pricing system.

In your early 20’s, you have very little driving experience. This leaves insurers with very little to assess when they are trying to determine if someone is a safe driver or a risky driver.

You must always start by determining how much insurance you need. Then, after you know your needs, you can start to focus on choosing the right insurer and building a policy that fits your budget.

Enter your zip code above to find the best car insurance rates in your area today!

When is buying coverage mandatory?

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Buying insurance isn’t something you can put off for very long. If you want to own a vehicle, you’re going to have to buy at least some insurance on the car as soon as you become the owner.

Since 49 of the states in the country have very strict mandatory insurance or financial responsibility laws, you’ll have to familiarize yourself with the law.

Anyone who is buying their first car in their late teens and their early 20’s needs to learn about the mandatory motor vehicle insurance laws so that they are ready to shop for coverage as soon as they start shopping for a vehicle.

The problem with brushing up on laws is that you need to know where you’ll be living because every state has its own coverage requirements.

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What type of coverage do you have to have by law?

If you’re wondering how much coverage you’re going to have to have when you buy insurance, there’s not one single way to answer this. If you’re living in a tort state with a very low-limit requirement, you might only need liability coverage. In these states, the average premiums are low.

There are states where average premiums are much higher simply because all of the residents must carry more coverage at higher limits. This usually happens in a no-fault state where you’re required to buy coverage for yourself.

The most common requirements include:

  • Bodily Injury Liability – will pay when you’re liable for injuries to others in an auto-related accident
  • Property Damage Liability – will pay when you’re liable for damage to someone else’s property in an auto-related accident
  • Medical Payments – will pay for your own immediate and reasonable medical expenses after you’re injured in an auto-related accident (only required in some tort states)
  • Uninsured Motorist Protection – will pay for your medical expenses and rehabilitation costs if you’re involved in an accident with someone who has no insurance (only required in some states)
  • Personal Injury Protection – will pay for your own medical bills, lost income, and other related expenses if you live in a no-fault state

Determining How Much Coverage You Need

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When you’re only 20, it’s easy to get confused by all of the terminologies you’ll run into. You’re not going to become an expert in insurance lingo right away and many never do.

The best thing to do when you’re looking for the right level of protection is to do your research.

One of the drawbacks of high school curriculum is that there really no requirement in a place where you’re required to learn the ins and outs of insurance. You’re left fending for yourself or leaning on your parents to help you do the heavy lifting.

If you’re not sure how much coverage you’re going to need, here are a few tips that can help you:

  • Most experts recommend that all drivers carry at least $100,000 per person, $300,000 per accident, and $100,000 per accident in liability insurance to protect assets and future income
  • If you own a home or other valuable assets, you’ll need higher limits and you may need a Personal Liability Umbrella for gap protection
  • If you’re going to lease or finance a car, the finance company is going to require you to carry comprehensive and collision
  • If your vehicle is paid off and it is worth less than $2000, you may want to go without full coverage
  • For paid off cars, the common rule of thumb is to drop collision when the collision premiums are more than 10 percent of the vehicle’s value
  • Carry Uninsured Motorist Protection if you live in an area with a high rate of uninsured drivers

How much can you expect to pay for insurance at the age of 20?

Auto insurance premiums can range from very low to very high. The coverage options that you pick will dictate how much you’ll pay for your insurance in total.

Some coverage options, like Collision and Bodily Injury Liability, are highly influenced by a driver’s age in addition to their driving history.

There’s no telling how much you’ll pay for insurance when you’re shopping for a policy on your own at the age of 20. Teens that 16 to 19 pay the most for insurance, but most of the time they are on their parents’ policy until at least the age of 18. When you branch off, it’s going to cost you a lot.

In fact, rates for 20-year-olds are, on average, 41 percent higher than the rates for 30-year-old drivers if all other factors are the same.

Why is insurance so expensive for people in their 20’s?

adobestock_53522173-1600x1600You’re not in your teens anymore but that doesn’t mean that you automatically fall into a low-risk driver class. Moat insurance looks at people in the teens and early twenties as high-risk drivers.

A 20-year-old is still a high-risk driver for another five years if they were licensed in their teens. According to accident data, teens are most reckless when they are under 19 but drivers in their twenties still fall into the second-riskiest class.

Can you stay on your parents’ insurance policy to save money?

You might not have to buy your own auto insurance right away just because you’re legally an adult. If you live with your parents, you may be able to stay on your parents’ policy as a driver.

Usually, insurers will allow this when you’re in their home or you’re going to college and you’re still a dependent.If you buy your own car, it doesn’t mean that you can’t add the car to your parents’ insurance.

As long as the vehicle is registered in your name and one of your parents’ names, you will be eligible to add the policy to their plan without any issues.

Some carriers don’t even have this requirement as long as you’re a blood relative in the home.

It’s best to stick with your parents for as long as you can. When you have no other option but to buy your own insurance at 20, it’s your duty to shop around and do as much homework as you can on pricing.

You could contact all types of carriers directly or you could spend your time wisely and get online quotes all at once. Use a quoting tool, enter your information, and get directed to instant quotes.

Enter your zip code below to  find car insurance rates that work with your budget today!

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Click here to view the interactive map and here to view the data tables.

Things to remember...
  • Ridesharing is a popular way to get around in some cities
  • Many ridesharing companies have their own rules and regulations regarding auto insurance
  • If you are a rideshare driver or are thinking about it, notify your insurance company

Transportation has always been an essential part of life. Throughout history, the modes of transportation have evolved, particularly public transportation.

Today, we have buses, subways, and taxis. And the newest addition to public transportation is ridesharing.

Ridesharing takes advantage of a major tool of the 21st century — the internet. Ridesharing services are provided through three main technologies: GPS, social networks, and smartphones.

By using a ridesharing smartphone app, riders can quickly arrange a one-time shared ride with a nearby driver.

Three companies have already made a significant mark in the world of ridesharing and are considered the best in the industry: Uber, Lyft, and Sidecar (who recently shut down).

There are plenty of perks for those looking to work for any of these rideshare companies.

A student can make some extra cash, or a parent can do the same for the holidays. Or a person may just need the extra income and have the vehicle to do so. Having flexible hours is also a major draw. A rideshare driver could also simply be an extrovert who’s not afraid to talk and enjoys the idea of sharing a ride with strangers.

Ridesharing is an appealing alternative to the age-old cab, but keep in mind that ridesharing is still fairly new and is not available in all cities and states.

If you are interested in trying out ridesharing, you can click here to see an interactive map and here to see a table of the ridesharing options available near you.

Better yet, if you already know that ridesharing is available in your area and also want to make sure you are adequately covered, start comparison shopping for insurance today! Enter your ZIP code above to compare the best auto insurance rates for ridesharing!

Methodology

ridehsaring-serviceConsidering that the following two companies are the largest ridesharing service providers, this study is based on information we collected from Uber and Lyft’s city lists.

Along with other companies wanting to make a name for themselves in this business, it appears that Tesla — the company responsible for the new technology to create auto-piloted cars — has hopped on the bandwagon and has plans to break into the ridesharing market.

There used to be a question of whether ridesharing should be legalized, but thanks to state-level legislative bills most states now allow it, but not all states are onboard as of yet.

Currently, there are no state-wide level bans as Nevada recently overturned its ruling, thanks to Uber.

So far, Alaska, Wyoming, and South Dakota are excluded from the ridesharing services of Uber and Lyft for various reasons:

Though more cities are in favor of ridesharing opportunities, some cities are pushing back. Contention exists on both sides — state law and the ridesharing companies — as to what should or should not be included in ridesharing regulations.

The major cities caught in the crossfire of this debate are:

With a constant discourse concerning the laws and regulations on ridesharing, it is increasingly important that individuals understand the laws regarding auto insurance and rideshare services.

Ridesharing Companies and Their Driver Policies

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Every ridesharing company must have a policy in place for every driver.

There are three possible stages for a rideshare driver during a work shift. These three stages are called Period 1, Period 2, and Period 3:

  • Period 1 – The ridesharing app is open, but the driver has not accepted a request, is not on his/her way to a passenger, and does not have a passenger in his/her car
  • Period 2 – Begins when the driver accepts a request and is on his/her way to pick someone up
  • Period 3 – Begins when his/her passenger(s) get into the car

For every period, there should be insurance coverage to protect the driver and passengers. Uber and Lyft have easily spelled out what an individual would need with regard to auto insurance coverage when considering becoming a rideshare driver.

– Lyft’s Requirements

Lyft has listed four insurance coverages included in their driver policies:

  • Contingent Liability (i.e., coverage only while waiting for a ride request)
  • Contingent Comprehensive and Collision
  • Uninsured/Underinsured Motorist
  • Primary Automobile Liability

The last three coverages are only in effect from the time a driver accepts a ride request until the time the ride has ended in the smartphone app.

– Uber’s Requirements

Uber offers an even more detailed description of which insurance coverage applies to which period. The company broke rideshare insurance into three categories:

#1 – On a Trip

Uber has a $1 million insurance policy that will cover a driver’s liability and what might happen between Point A to Point B. Uber’s insurance policy includes these three coverages:

  • $1 Million Liability – A commercial insurance policy that covers injuries or damages to third parties and their property. It protects the driver financially and takes precedence over any personal auto coverage the rideshare driver might have.
  • $1 Million Uninsured/Underinsured Motorist Injury – If another driver is at fault for a car accident and does not have adequate insurance, those who were bodily injured in the rideshare vehicle will be taken care of.
  • Contingent Collision and Comprehensive – Any physical damage that occurs during a trip is covered and is treated as long as the rideshare driver has personal collision and comprehensive coverage.

#2 – Between a Trip

Uber provides a third party liability plan that meets or exceeds the third party liability insurance requirements of every U.S. state.

The liability covers bodily injury up to $50,000 with a total of $100,000 for the accident and up to $25,000 for property damage. Technically, the coverage ratio would be listed as $50,000/$100,000/$25,000.

#3 – Offline

Since it was already established earlier that insurance is required while on a trip, a rideshare driver must have personal auto insurance and is still required to meet state regulations.

Auto Insurance for Rideshare Drivers

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Every ridesharing driver needs to have auto insurance in place. If you are already driving for a ridesharing company but your insurance company does not know, you need to make your insurance provider aware. Click here to see the second table, which displays auto insurance companies offer Ridesharing insurance in your state!

Otherwise, there may be repercussions:

  • Your insurance provider could choose not to cover you in an accident
  • Your insurance provider could cancel your policy and refuse coverage

It’s better to be dropped from an insurance company for providing honest and accurate information about rideshare services than to keep the information from a company and then get in an accident.

Not informing your insurance company that you are a rideshare driver makes you liable for any accident-related costs.

On the other hand, if your insurance company cancels your policy due to being a ridesharing driver, you are free to find an insurance company that will provide coverage to meet your needs.

Click here to find insurance companies offering ridesharing insurance by state. Take notice, though, that some companies offer policies for only Period 1 and others offer policies from Periods 1 to 3.

A Final Word

If you are a rideshare driver or plan to be one soon, you need to inform your insurance company. That way, you have time to look for a company that will cover you as a ridesharing driver in case your current insurance company refuses to do so.

If your current insurance policy does allow for ridesharing, make sure your existing insurance policy covers the gap. If it doesn’t, find a policy that will work for you as a rideshare driver.

Start comparison shopping today for the best auto insurance rates out there for a rideshare driver. Enter your ZIP code below to get started!

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Things to remember...
  • Car insurance does not typically cover engine failure
  • Engine failure might be covered by insurance if the damage resulted from a collision or comprehensive loss
  • Some insurance companies can add mechanical breakdown coverage on your policy
  • An extended warranty may cover engine failure

In most cases, engine failure is not covered by your car insurance. Car insurance policies must provide required coverage which can include liability for bodily injury, liability for property damage, personal injury protection, and uninsured motorist coverage.

None of those four required car insurance coverages applies to your insured vehicle. So, those four do not cover your insured car and will not pay for engine failure.

You can purchase additional insurance coverage for collision, comprehensive, and GAP insurance. Each of these three extra options provides coverage for your listed vehicle. When you read your car insurance policy, there are exclusions.

Enter your zip code above to find the best, extended coverage rates in your area!

Collision Coverage Can Cover Some Types of Engine Failure

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Collision coverage usually covers for the direct and accidental loss to your vehicle when you have a collision with another object. Coverage for wear and tear and mechanical breakdown get listed as exclusions in most car insurance.

The exception will be when the loss is the result of an event that is covered somewhere else in your insurance policy. That event would be when you have a collision that results in damage to the engine.

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Comprehensive Coverage Might Cover Engine Failure

Comprehensive coverage usually covers loss to the vehicle when it is not part of a crash. The kind of loss for this coverage of insurance could include a loss from:

  • Falling objects
  • Fire
  • Theft
  • Explosion

If your engine has failed after your car burned in your garage as a result of a house fire, the comprehensive coverage may cover the motor damage. If someone steals your automobile and the engine fails, that may be a covered loss.

Those types of engine failures would need to be directly related to the event.

Losses Insured by Comprehensive Coverage

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There may be additional problems with a failed engine where coverage could apply.

If a problem develops with a car after an accident or comprehensive loss has happened, you would have to prove to the insurance company that the damage to the engine is the direct result of the events causing the loss.

A good mechanic can determine what caused the problem, such as one that could develop on a lower portion of your engine after hitting a huge pothole.

If your mechanic can prove that the engine problem started after the accident, then you could get the insurance adjuster to pay for the engine damage. You need to show records to the adjuster of the following:

  • Required maintenance completed by due dates
  • Recent mechanic reports showing no problem with the system under question
  • Regular monthly maintenance completed
  • Plus other factors

To convince an adjuster, you need a mechanic to provide proof to the insurance company that engine damage resulted from the accident or comprehensive loss.

Alternative Coverage for Engine Failure

When your car insurance policy does not provide coverage for engine failure, there may be an alternative coverage. Some of those coverage options could include:

  • Automobile manufacturer bumper to bumper warranty
  • Vehicle manufacturer powertrain warranty
  • Extended Warranty
  • Secondary market warranty or mechanical breakdown warranty

Car Manufacturer Bumper-to-Bumper Warranty

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Automobile manufacturers provide a warranty that covers a vehicle. The length of the warranty is often a combination of months and miles driven. It is common today to see a bumper to bumper warranty last three years or 36,000 miles, whichever comes first.

Some of the exclusions to the bumper to bumper warranty are for:

  • Accident
  • Misuse
  • Alteration
  • Insufficient or improper maintenance
  • Bad fuel
  • Chemical or environmental damage

If your engine fails during that bumper to bumper coverage period, and the cause is not one of the listed exclusions, the warranty should cover your engine failure.

Car Manufacturer Power Train Warranties

Many automobile manufacturers now offer a powertrain warranty that is even longer than the bumper to bumper coverage. Companies like Chevrolet provide powertrain warranty coverage for five years and 60,000 miles, whichever comes first.

The power train under the Chevrolet warranty includes the following components:

  • Engine
  • Transmission and transaxle
  • Transfer case
  • Drive systems
  • Emission control systems

If your engine fails in the first five years or 60,000 miles, you will have a powertrain warranty coverage through your car manufacturer to cover engine failure.

Factory Extended Warranties

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Car dealerships sell extended warranties backed by the manufacturer. These extended warranties can cost from $1,000 up to $2,200 or more, depending on the type of vehicle you buy.

Consumer Reports states that 55 percent of extended warranty policy owners never used their coverage during the life of the warranty.

Consumer Reports went on to say that the people having the most satisfaction from buying an extended warranty were those people that used the warranty most frequently.

If you had purchased an extended warranty, check with your warranty company to determine your coverage for an engine failure.

Insurance Company Mechanical Breakdown Warranties

Some insurance companies offer a rider on your car insurance policy that will cover mechanical breakdowns.

There are additional costs added to your car insurance policy for this kind of coverage. Adding this coverage is often restricted to new vehicles. This warranty can be renewed for up to seven years or 100,000 miles, whichever comes first.

Third-Party Extended Warranties

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A third-party warranty is an extended warranty not purchased from the factory. Consumer Reports states that the satisfaction of buyers of third-party warranties is 41 percent, and those buying factory warranties is 53%.

If you purchased an extended warranty from any third-party warranty company, you might have coverage for your engine failure.

When you have an engine failure, you will probably not be able to get coverage through your car insurance company. There are some exceptions, and they would include damage that was the direct result of an accident or comprehensive loss.

You may also have purchased mechanical breakdown insurance from your insurance company.

If your car insurance company does not cover your engine failure, you may have other options. If you bought an extended warranty, you might have coverage for your engine failure.

Enter your zip code below to compare car insurance rates from top companies now!

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Things to remember...
  • GAP insurance covers the difference between a car’s value and what is owed on it at the time of an accident
  • Most cars lose 20 percent of their value in the first year
  • GAP insurance only covers the difference in a car’s value; it will not cover repairs, missed payments, or other expenses
GAP insurance (Guaranteed Asset Protection) is designed to protect your financial interests in the event that you total your vehicle in an accident.

This coverage takes care of the difference between what you actually owe and what your insurance company says is the insurable value.

It can provide you with peace of mind in some cases, but it’s not necessary for every car.

Compare insurance rates and coverage options today by entering your zip code above!

What is GAP insurance?

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GAP insurance is sold by dealers and some insurance companies. It will cover the “gap” that sometimes exists between what your car is actually worth and what you owe on it at the time of an accident.

It’s typically more affordable when you purchase it through your insurance company, and you can always shop around for a plan that will provide you with better rates in addition to GAP insurance.

GAP insurance is available on new and used cars.

How does this protection work?

Most people today buy new cars with the help of a finance company. Payments are made for a period of years until the car is paid in full.

However, there are times when a driver gets into a serious accident and the insurance company declares the car a total loss.

The insurance company will determine the value of the car and pay that amount.

– The Car is Worth More than the Loan Balance

In the perfect scenario, the value of the car will exceed what the policyholder still owes to the finance company.

The insurance agency will send a check for the balance of the loan to the company, and the remainder of the money will go to the policyholder, so there is no need for GAP insurance.

– The Loan Balance Exceeds the Car’s Value

On the other hand, there are many times when the amount owed on the car actually exceeds what the vehicle is worth. In this case, the insurance company will pay the loan company the value of the car in accordance with the insurance plan.

The difference between that payment and the amount owed on the loan will have to be covered by the policyholder.

When this happens, the policyholder will continue making payments until the loan is paid in full. GAP insurance protects you so that you won’t have to make payments on a car you no longer own.

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Understanding How Insurance Companies Determine if a Car is a Total Loss

In general, cars are declared a total loss when the cost to repair it exceeds the actual value. The process is the same whether a car was purchased new or used.

It’s important to note that there are times when the company will total out a vehicle even though the repairs are a little less than the value of the car. You can expect the company to declare a total loss if the repairs are 75 percent or more of the total value.

Once the insurance company determines that the car is a total loss, they’ll let you know what valuation they used to arrive at this decision.

Most insurance companies work off actual cash value, which is the amount you could expect to sell the car for prior to the accident.

Insurance companies determine the fair market value by using tools like NADA valuation system. They also look at the condition of the car prior to the accident and the mileage.

The features you had in the car may play a role, so be sure to notify your company if your car had upgrades that they might not be aware of.

When You Should Look Into GAP Insurance

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People are often confused about whether they’ll even need GAP insurance. You certainly don’t want to pay for unnecessary coverage, but these plans can really help you out financially if your car has negative equity.

You should look closely at this option if you:

  • Take out a loan that has an extended term because you’ll require more time to build equity
  • Purchase a brand that depreciates faster than others
  • Purchase the car with anything less than 20 percent down
  • Borrow more than the purchase price by financing negative equity from an old car, extended warranties, tax, license, and other expenses

Buying an Older Car: What to Know About GAP Insurance

Remember that the purpose of GAP insurance is to help out people who owe more on a car than it’s worth. If you’re paying cash for an older car, then there’s no financing note on it to insure.

GAP insurance is absolutely not necessary in this case, but you may want to carry collision and comprehensive coverage to make repairs if you’re in an accident.

The more you drive, the faster your car depreciates. Regardless of how old your used car is, you may want GAP insurance is you’re financing a commuter car that will be driven more than 15,000 miles per year.

Check the value of your car before making the purchase. If you’re getting a great deal and are financing less than 80 percent of the value, then GAP insurance typically won’t be necessary.

Where to Find GAP Insurance

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Most dealers offer this coverage at the point of sale, but you can also go through your insurance provider. Before signing with the dealer, call your agent to see if you can get a better rate with the company you already have.

Additionally, you can also shop around to save money on your insurance premium and the GAP insurance.

GAP insurance is a smart investment for people who have negative equity in their cars. It must be purchased from the dealer at the time that you buy your car, or you can tack it on to your regular insurance plan at that time.

If you feel that your insurance company’s fees are too high for this coverage, then use a comparison tool to easily shop around for a better plan.

Compare and save on auto insurance today by entering your zip code into our free tool below!

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Things to remember...
  • Adding a teen driver to your policy can lead to a drastic increase in rates
  • Insurance companies may refuse to cover claims if they were not aware of a driver
  • It is possible to bring rates down by asking for good student discounts and changing coverage levels

It’s an exciting time when kids start driving, but it can also be very expensive. However, simply being prepared for the changes can help you take a little control over the rise in costs.

Enter your zip code above to compare multiple car insurance rates at once!

Keep the Insurance Company Informed

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Insurance companies like to be informed about potential changes to your risk level. If you fail to inform your insurance company of a new teen driver, you could wind up facing serious problems down the road.

If the company decides to view your omission as misrepresentation, then they could:

  • Refuse to cover an accident
  • Charge you back premiums going back to the date the license was issued
  • Forgive the oversight and cover the accident

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Expect a Substantial Increase in Rates

You can expect a substantial increase in your auto insurance rates when you add the teen driver to your policy.

The fact is that car crashes continue to be the leading cause of death for teenagers between the ages of 15 and 19. Reports show that the average increase for a teen driver is 79 percent.

Girls tend to see a more moderate increase in rates, and location makes a big difference in how far the premiums will go.

New Hampshire has the largest rate jumps for teen drivers with an average of 111 percent, and Hawaii has the most modest increase at just 17 percent.

One way to keep your premiums down is by raising the deductible for your teen driver on an assigned car. However, be sure to keep your liability limits high or even raise them in order to protect yourself from accident-related lawsuits.

Your Own Policy is Still the Best Bet

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You’ll find that it’s cheaper to put your child on your own policy than it is to go with a free-standing policy. You’ll then be able to take advantage of multi-vehicle discounts, and your son or daughter can benefit from your own good driving record.

One way to save is by assigning the least valuable car to your child and let the company know that he or she will not be driving the more expensive ones.

If you take this step, be aware that the insurance company may not cover an accident caused by your child if she drives one of the cars she’s not insured for.

Learner’s Permit Requirements

In general, teens who are still on a learner’s permit and will only be driving under the supervision of a licensed adult do not need to be listed on a policy.

However, you may want to call your insurance company to confirm this information and be sure that your child will be covered in the event of an accident.

If you’re going to face high rates for simply having a new driver on a temporary permit, then you can shop around for a more understanding company.

Ways to Save on the Rates

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The good news is that there are some ways to save on the rate increase associated with a teen driver.

In addition to shopping around for more attractive plans with affordable premiums, you can also:

  • Ask about good student discounts
  • Enroll your child in a certified driver education school
  • Delay the driving age from 16 to 17

Another benefit of delaying the age when your child starts driving is that 17-year-olds are 42 percent less likely to be involved in an accident.

Check the Coverages

One way to keep the rates down for your teen driver is by revising the coverage or deductible. If your child is in an older car that’s worth less than $2,000, then it’s really not necessary to pay extra money for collision and comprehensive coverage.

This is a great option on cars that are owned outright, but you’ll want to set aside some money in a savings account so that you can cover damage yourself if there is an accident.

Before you blindly accept the change in premiums, shop around with other companies to see if they can provide you with better rates. Your child may qualify for discounts based on grades and driving classes.

You can also bring the cost down by eliminating comprehensive plans and raising deductibles.

Enter your zip code below to find the best car insurance for your needs today!

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Things to remember...
  • Most specialty companies require that a car be stored in a garage
  • Drivers are encouraged to invest in Agreed Value plans to protect their investment
  • Expect insurance companies to also have limitations on miles driven

Your classic car is your pride and joy, so you want to give it the right level of protection. In addition to insurance, you may also have it secured in a locked, weathertight garage.

However, if you don’t have a garage, then you may find that it’s difficult to find an insurance provider. The good news is that you can always shop around to find a company that will protect your car even if it just has a simple canvas cover for protection.

Enter your zip code above to compare multiple car insurance companies at once!

Definition of an Antique Car

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The tricky thing about insuring your older car is that the definition of a classic can vary from one company to another.

The Antique Automobile Club of America says it’s simply any vehicle that’s more than 45 years old. However, states like Michigan require that the vehicle is more than 26 years old and acquired as a collectible.

It’s important that you speak openly with any insurance company about the vehicle that you own. Your agent can provide you with more information regarding their definition and your future rates.

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Special Insurance May be Required

Some people inherit classic cars or stumble across a great deal, and they don’t realize that they need the right insurance plan.

Traditional policies work under the assumption that cars will depreciate, but classic autos can rise in value over time.

The good thing about getting insurance from a brand that specializes in classic cars is that these companies typically understand how classic cars are treated. They know that the cars are taken care of the following ways:

  • driven infrequently
  • protected from the elements
  • pampered

When a car is mainly used for weekend shows a few times a year, you can expect to find reasonable rates by shopping around.

Proof of A Proper Garage is Typically Required

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Classic cars require special insurance, and most plans require that they will be kept in an appropriate garage.

In addition to stating that the vehicle will be sheltered from the weather and vandals, you can also expect to send pictures to the company to prove that you have the right structure.

Many owners consider the garage to be just another expense associated with owning a classic car. If you don’t have an on-site garage, then consider renting space from someone else.

You may want to have it in a climate-controlled facility that can also keep a charge on the battery.

Whether you’re going to store the vehicle on your property or someone else’s, you can save a little money by shopping around for better rates.

Standard vs. Agreed Value

When it comes to vehicle valuation, insurance companies usually rely on NADA values. However, it’s harder to determine the worth of an older car that’s no longer in production.

The insurance companies are more than happy to set a value for you, but it may not be near enough to cover replacement parts that are hard to find and the higher cost associated with specialty garages. This is why it’s important to go with an Agreed Value policy.

With this type of policy, you can set the insured value so that you’ll be able to get your car back on the road after an accident.

You may have to accept certain limitations on mileage, a ban on commuting, and the requirement that your car will be stored in a garage.

These restrictions may seem like a pain, but they’re in place to protect the insurance company from losses and to keep your prized possession safe.

Finding the Right Coverage

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If you have a high-value classic car, then it may be worth the investment to store it in an appropriate facility.

However, if your car is currently in poor condition and won’t be restored for a while, then you may not want to make the garage a top priority just yet.

In this case, you can speak openly with your insurance company about the value and condition to see if they’ll cover your car even though it’s not in a garage.

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Things to remember...
  • If you are in the market for a new car, then you probably already know that car insurance is a requirement in almost every U.S. state
  • If you already have an auto insurance policy, getting insurance for your new car is as simple as calling your insurance provider to let them know that you need to update your policy
  • There are plenty of options for insurance coverage for a new car if you are not already insured
  • Before you agree to any quote that you receive and sign up for auto insurance coverage, make sure that you have checked into enough options to be sure that you are getting the best deal possible
  • If you already have insurance for your house or apartment, then you may want to consider getting car insurance through the same company because there are lucrative bundling discounts offered

Getting car insurance for a new car that you are looking into purchasing is a requirement almost everywhere in the U.S., but the good thing is that it is not a difficult process to go through at all.

If you already have car insurance for another car that you drive, then you may want to simply update your auto insurance provider that you have purchased another car and need to make some changes to your existing policy.

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If you are getting car insurance from scratch, you will find that it definitely pays off on your insurance bill to put in the time to do your homework in getting enough quotes from different companies in your area before committing to any specific auto insurance provider.

Shopping around is definitely the best way to prevent yourself from overpaying for the auto insurance coverage that you need.

Requirements for Auto Insurance for a New Car

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The best place to start in looking into auto insurance for a new car is to find out what is required under your state law. If you are not buying your car outright, you might also need to be aware of any auto insurance requirements from the dealer that you are leasing the car from or the bank that you are taking out the car loan from.

This information can be obtained in the loan or lease documents you sign. The major auto insurance companies licensed in your state will be able to ensure that you are meeting all of the state minimums for auto insurance coverage pursuant to state law.

Once you are familiar with what type of insurance you are required to carry, you can easily request auto insurance quotes online.

You will be asked to provide some basic information to get a more accurate quote for auto insurance coverage, such as the year, make and model of your vehicle as well as your personal information, including your zip code and contact information.

Do not make the mistake of thinking that every auto insurance company is licensed to provide coverage in all states in the U.S.

When you request a quote for auto insurance coverage, you will be asked to provide your current zip code, which is an important way to filter out all of the companies that are not authorized to provide auto insurance policies in your state.

You may also want to investigate the company that you are considering. You can do this by contacting your state department of insurance for information about any consumer complaints related to that insurance provider.

Additional Considerations for Your Auto Insurance Coverage

To make sure that you are getting enough auto insurance coverage for you and your family, it is always best to have a general idea of what car insurance actually covers for your car.

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You do not want to only have a basic auto liability policy in most instances because you would only be covered for damage that you cause to another vehicle or driver in a car crash. This means that damage to your own car would not be covered by your own insurance.

To make sure that you are not in this kind of bind, you may need to consider additional coverage options right from the start.

The most popular auto insurance coverage options are comprehensive coverage and collision insurance.

With both of these coverages, you will be protected in the event that some type of damage happens to your car. This could include a heavy object falling on it and damaging it or if it is struck in a hit and run accident. Either one of these scenarios is a possibly no matter what part of the country you live in.

Understanding Your Policy Limits and Maintaining Adequate Coverage

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Every auto insurance policy has a specific set of limits for coverage. This refers to the amount that the auto insurance company is responsible for paying out if you are responsible for an auto accident.

You will be able to select the limits that make the most sense for you and your family as long as they are equal to or greater than the limits imposed by state law. It would be a mistake to think that you have enough coverage just because you have met the minimum standards in your state.

While state limits are important, they typically do not cover the entire extent of the damage in a car accident.

If you are not willing to pay out of pocket for an accident that you cause, then you should have enough coverage to replace another vehicle that you damage as well as any medical expenses incurred by any other drivers involved in the accident.

Wrap Up on How to Get Insurance on a New Car

Even though car insurance can seem like a daunting thing to consider when you are in the middle of a new vehicle purchase, the process of getting the auto insurance coverage that you need is actually quite simple.

With the ability to get quotes online, you can quickly get an idea of the cost of coverage in your area. It is important not to rely on a single quote in making a decision on your auto insurance coverage.

You will want to get a sufficient number of quotes so that you are sure you are making an informed decision about your auto insurance coverage and not paying too much for your policy. The type and amount of coverage you are looking for are also major factors in how much you will end up paying for auto insurance coverage.

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Things to remember...
  • For households that have more than one car at that particular residence, they likely have a multi-car auto insurance policy
  • Auto insurance companies allow multiple cars to be insured under the same auto insurance policy and even offer a discount for families who choose to do so
  • When you have a multi-car auto insurance policy, all of the policy terms and renewal deadlines are the same for all cars under that insurance policy
  • It is not always automatically cheaper to have all cars in a particular household because the driving records and claims histories of each driver are different
  • Before signing up for a multi-car insurance policy, it is best to shop around and make sure that you are getting the cheapest possible overall auto insurance coverage

If you are curious about a multi-car insurance policy, this could be because there are multiple drivers in your household who require auto insurance coverage.

Auto insurance companies love offering a multi-car insurance policy to families because that means they are guaranteed to have more drivers signed up for their insurance coverage.

As always, the only way to know whether a multi-car insurance policy is the best option for you and your family is to price out specific policies and explore all of your auto insurance options.

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Why Auto Insurance Companies Offer Drivers a Multi-Car Insurance Policy

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The reason why so many auto insurance companies are keen to offer a multi-car insurance policy is very simple. They want to get as many cars and drivers signed up for their insurance as possible.

The car insurance market is very competitive, so every new driver than an auto insurer can sign up makes a big difference to their bottom line.

With a multi-car insurance policy, the policyholder has one auto insurance company for multiple vehicles and drivers.

This is a very typical situation for a family with multiple drivers living in the same household. The way that a multi-car insurance policy works is that there is only one policy term for all of the insured cars under that policy.

In addition, the payments for this policy are all tied to the same policyholder, so they will be made on the same date.

If you are interested in a multi-car insurance policy for you and your family, you should check with your current auto insurance company to see if there is a company limit on the number of cars that can be insured under a single policy.

Some auto insurance companies will have a limit of four cars that can be insured as part of a multi-car insurance policy.

The only way to know this information for sure through your current auto insurance provider is to contact them directly at the number that is found on your proof of insurance card.

If you have the direct contact information for your auto insurance agent, you could also speak with him directly about whether a multi-car insurance policy is a possibility for you.

Reasons Why You Might Want to Consider Multi-Car Insurance Coverage

The top reason for choosing a multi-car insurance policy is that it may be the least expensive option for car insurance for a family with multiple drivers.

For example, if you are a married couple with children, it may be much cheaper to have your teen driver listed as an additional driver on your current auto insurance policy rather than having him or her obtain a separate policy.

In addition to the lower cost that may be associated with a multi-car insurance policy, this type of coverage may also be more convenient for your household.

The reason for this is that all of the insured cars and drivers would be listed under a single policy, so it is much easier to stay on top of payment deadlines and to make any necessary changes to your coverage.

This is a great way to make sure that you do not miss any necessary information that needs to be updated for any of the cars on that specific policy.

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Reasons Why You Might Not Want to Consider Multi-Car Insurance Coverage

Even though many auto insurance companies advertise a steep discount for a multi-car insurance policy, it still may not be the right option for you. In some situations, it would actually be cheaper to have a certain driver in your household insured under a separate policy.

For instance, if one member of your household has a poor driving record recently or a very low credit score, he or she may be driving up the cost of insurance for everyone. It may make more financial sense to have a separate auto insurance policy for that driver specifically.

As with any changes to your auto insurance coverage, the only way to really know what is the most cost-effective approach for you and your family is to call and ask for quotes based on your various options.

When you speak with various auto insurance agents, be sure to describe your specific situation so that they have all of the details they need to make the best auto insurance policy recommendations for you.

If you are interested in other ways that you could save money on your auto insurance coverage besides a multi-car insurance policy, there are other options available. One way could be to bundle your auto and homeowner’s insurance policies with the same insurance provider.

Similar to the savings that most families get with a multi-car insurance policy, this type of bundling is attractive to insurance companies because it means that they will get more business from existing customers, which is a great way to improve their bottom line. You could also consider raising your deductible amount.

Final Thoughts on Multi-Car Insurance Coverage

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One of the great things about a multi-car insurance policy is that it could save you and your family a lot of money on your car insurance bill.

Auto insurance providers like providing a multi-car insurance policy option to insured drivers because it means that they can grab more business from existing customers and expand the total number of cars insured through their auto insurance coverage. The savings are passed along to the insured driver as an incentive.

Before you decide that a multi-car insurance policy is a good choice for you, you should take the time to price out all of your options for coverage to be sure that it does not make more sense for you to have some cars or drivers insured under a separate auto insurance policy.

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Things to remember...
  • You must carry physical damage coverage on your vehicle if you want your insurer to pay for your vehicle repairs
  • If someone hits your vehicle in the parking lot, you can file a third-party claim against the other driver’s insurance
  • Even when you’re filing a third-party claim it’s best to contact your own company to protect your interests
  • If you can’t identify the person who hit your car, you can file a collision claim against your own policy
  • When you chose not to carry full coverage, you’ll need UMPD for coverage to pay for repairs after a hit-and-run loss

You do everything in your power to obey traffic laws and drive safely so that your insurance rates won’t go up. Unfortunately, no matter how good of a driver you are, not all losses can be prevented. This is especially true when someone hits your unoccupied car while you’re in your office or in your own home.

After you get past the flood of emotions that you feel when you discover that your vehicle has been hit, you have to start planning on how you’ll get your car fixed.

If it’s minor damage, you might be interested in paying for the repairs out of pocket to keep the insurance out of it, but when there’s significant damage, this isn’t realistic. If you’re not filing a claim out of fear of an insurance rate increase, here’s what you should know.

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Does a basic auto insurance policy pay when your car is hit by another driver?

 

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If you’re not at fault for the accident, it doesn’t always mean that your insurance will pay for your damages.

When consumers buy a basic insurance policy, their policy will only pay for damages to others and not damages to the policyholder’s property listed on the policy. This is true if you’re to blame for the damage or if someone else hits you.

Your auto insurance will offer you physical damage coverage for an additional premium. While 72 percent of policyholders have full coverage, many people who own their cars outright will elect not to carry physical damage coverage because it can get rather expensive.

In fact, the average cost for comprehensive and collision is around $440 per year.

Even though full coverage can be expensive to carry, adding comprehensive and collision insurance is the only way to ensure that you’ll have some form of coverage if your car is hit, vandalized, stolen, torched, or flooded.

In order to buy physical damage coverage, you may have to pass an inspection to prove that your car doesn’t have any pre-existing damage.

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Which coverage pays when someone hits your car and doesn’t leave their information?

By law, drivers who damage an unoccupied vehicle are required to leave their information on a paper so that the vehicle’s owner can contact them to make arrangements.

Anyone who hits a car and leaves the scene without leaving their accurate information will be guilty of hit and run. While this is a serious crime, it happens more often than you’d think.

If you’re unlucky enough to be the victim of a hit-and-run driver, you can file a claim against your own policy as long as you have collision insurance.

It’s collision and not comprehensive that will pay for repairs needed after your vehicle is hit by someone. You’ll probably be required to file a policy report before the carrier will classify it as a hit-and-run claim.

Do you have to pay anything when you file your collision claim?

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When you’re not to blame for a crash you typically collect against the other driver’s insurance.

This is why you don’t have to pay any type of deductible. Unfortunately, you’re not so lucky when your car is hit be an unidentified party.

Since you couldn’t locate the person and you’re filing a collision claim, you will be obligated to pay your deductible.

Are there any other alternatives if you can’t afford collision?

You need to consider the cost of collision insurance and compare it to the value of your car before you decide to carry it.

For older cars and models that don’t retain much value, carrying collision insurance doesn’t make much financial sense. In this case, there is an alternative form of protection that you can buy and it’s called UMPD.

UMPD stands for Uninsured Motorist Property Damage. It’s an optional form of protection that can be added to your policy for a minimal cost.

It will pay up to $3500 to repair your car without a deductible if your car is hit by someone who flees the scene or someone who has no insurance.

If you have UMPD and collision, it will waive your collision deductible.

What happens if the driver who hits your car leaves their information?

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If your car is hit and the driver is ethical enough to leave their information, filing the claim will be easier. You can contact your insurer and let them know the event happened before you do anything else. Then you can give your insurance adjuster the driver’s contact information and their insurance information if you have it.

After contacting your insurer, they will initiate the process so that you can file a third-party claim.

The driver’s Property Damage Liability limits will be used to pay for your repairs as long as the driver has an active insurance policy. If you find out their insurance isn’t valid, you’ll file a claim under your collision insurance or your UMPD coverage.

Will filing a claim against your own policy affect your rates?

It doesn’t seem fair to think that your rates could go up for filing a claim. When you’re at fault for a loss, you can almost guarantee that you’ll see a rate increase unless you have accident forgiveness on your policy.

When it’s classified as not at fault, you don’t have to worry about surcharges.

Car insurance companies won’t penalize you as long as they investigate and they find that your car really was hit by a driver who left the scene. This is true even when you file a collision claim against your own coverage.

If you file a claim after your car is hit, it’s your insurer’s job to help you. Consumers who don’t feel like they’re getting help should search for a new carrier. Get instant quotes from several carriers and switch to one with a better reputation.

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Things to remember...
  • If you finance a car, you have to comply with the terms of the finance contract to avoid raising the balance of your auto loan
  • When you’re borrowing from a lender to buy a car, you’re technically not the vehicle owner or titleholder until you’ve paid off your loan.
  • When you pay the auto loan off, you will receive a clear title
  • Even though you don’t legally own the vehicle outright, it’s your duty as the registered owner of the car to maintain insurance on the vehicle.
  • The lender and the dealer will not provide coverage for the car once you take possession of it
  • Not only does the borrower have to comply with auto insurance laws mandated by the state, they also have to comply with the rules set forth by the lender
  • Virtually all lenders require their borrowers to purchase full coverage that includes at least comprehensive and collision coverage.
  • Many lenders will also limit the deductible that you choose to $500 or lower to ensure that you can repair the car when it’s damaged

When you buy a car, there are two ways that you can qualify for a loan. These two options are referred to as direct lending and dealership financing.

As a borrower, it’s up to you to decide if advance credit terms offered direct through the bank offers more of an advantage than the convenience that you can enjoy in the dealership finance office.

While the process of obtaining each loan is different, most loans that you secure directly from your bank or credit union have the same requirements and terms as the loans that you can select from the dealer. One of the terms that you have to comply with when you’re borrowing a great sum of money to buy a car involves insurance.

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Is auto insurance included in your finance contract?

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When you’re approved for a loan, the creditor will issue a statement that shows how much you’ll pay each month, how much you’re financing, what the Annual Percentage Rate is, the finance charge, and the total cost of all of the payments.

All of the charges will be found in the loan contract. If you decide to add extras like a warranty or GAP insurance that’s sold in the finance office, the amount financed and total interest paid can change.

It’s important that you know that the contract won’t automatically provide you with insurance for the car. It’s your duty to buy auto insurance separately.

What is the difference between GAP insurance and auto insurance?

If you’ve financed a car and purchased GAP auto insurance with your contract, you might have assumed that you were paying for your insurance each time you paid your car note. While this is a fair assumption to make, GAP insurance isn’t the same thing as standard auto insurance.

You still need a standard auto insurance policy when you buy the supplemental coverage.

GAP insurance stands for Guaranteed Auto Protection. It’s a supplemental form of coverage that’s available to help protect you from financial loss if you total a car that’s being financed or leased.

The purpose of GAP coverage is to pay after the standard auto insurance pays out the car’s total value after a damage loss. As its name implies, GAP insurance is supposed to fill in the gap that’s present when you owe more than a car is worth.

You’re Required By the State to Buy Auto Insurance

When a state has a mandatory auto insurance law, it’s the legal owner’s responsibility to comply with the law.

If you own the car outright, there’s no question who the legal owner is. When you’re financing a car, you don’t technically own the car until the loan balance reaches $0.

Even though you’re not the title holder or owner of the car, it’s your duty to register the vehicle that you’re financing in your name.

In fact, the dealer will finance the car for you showing you as the registered owner. Since you’re the registered owner of the car, it’s your job to buy a minimum amount of mandatory coverage on your car so that you satisfy the law and avoid penalties.

What kind of coverage is required by the state?

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You need to comply with state law to avoid being cited for a misdemeanor.

While coverage is required, not all coverage is mandatory. Each state has different coverage requirements based on the type of system that the state operates under. Most of the requirements are means to pay for others damages and not yours. Here’s what you’ll need to buy at the minimum:

  • Bodily Injury
  • Property Damage
  • Personal Injury Protection (only required in no-fault states)

Your Lender Will Require Full Coverage

The state is concerned with the damage that you cause to others. If the state didn’t pass compulsory auto insurance laws, there would be no way to ensure that people could pay for their repairs and their medical treatment after they were a victim in a car accident.

While liability insurance is necessary, you need more than just that if you have an auto loan.

One of the terms that you agree to when you take out your auto loan is that you’ll buy full coverage on the car. Full coverage consists of comprehensive and collision coverage and it protects the property that’s listed on the policy if it’s damaged.

Can you choose any deductible for your physical damage coverage?

You have to have comprehensive and collision at all times but you also have to comply with the deductible rules.

The deductible is the amount that has to be subtracted from your claim when it’s paid. Since carrying a high deductible can be a risk to the lender, it’s common for the loan contract to say that your deductible must be $500 or lower.

When you’re buying a car at a dealership, you have to budget for the monthly car payment and also insurance expenses. Don’t overlook how much insurance premiums can cost you over the span of a year.

To find more affordable options, you can get online quotes from several companies at once. Use an online quote tool, enter your zip, and start comparing the premiums for various limits of liability coverage right this very minute.

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