One cannot predict an accident but can prevent the loss through Insurance coverage.
Just like humans, vehicles do have Insurance policies.Car or Auto Insurance protects them from any future losses. It helps to recover from financial loss due to accidents or theft. The premium of Car Insurance depends upon the type of vehicle, registration, and third parties involved.
Why is CAR Insurance needed??
Mandatory :
Few states made it mandatory to have a car or motor insurance. In India, it is compulsory to have at least third-party car insurance just after one buys a car. It recovers the financial loss while damaging parts of the vehicle. If a sudden death of the car owner happens while driving, it claims some amount to the family.
Hospital Bills:
When a person gets admitted because of an accident, third-party Insurance helps them pay the hospital bills. Whether they are expensive or not, they will pay the bill. It is pretty helpful in such stress and also be financially recovered.
Unfortunate Demise
If the car owner or the family’s breadwinner loses their life in an accident, the monetary cover will help them financially. We expect a person to return home safely, but it’s not always sure. Misfortunes never come with a warning, but the family should go on with their lives. This policy helps the family recover financially.
Car Insurance in the US
The United States is one of the largest automobile markets in the world. Through Statistics, Nearly 2.5 billion registered vehicles until 2021. According to the IIHS organization, there were 11 deaths in 100000 people due to accidents. Nearly 30000 fatal car crashes happened in 2019, resulting in more than 30000 deaths.
According to the National Association of Insurance Commissioners, over 5000 plus Car Insurance agencies in the USA by 2019. Many states except for Virginia made it mandatory for drivers to carry Car Insurance papers every time. There are different types of car Insurance and have monthly or yearly plans for payment. Some are expensive, but it is safer to have Insurance due to unpredictable events. The average Insurance policy cost would be around 3500$ per year or 200$ per month.
Types of Car Insurances
Third-party car insurance(or) Liability coverage:
If you hit a car by accident, this policy helps the other party recover the damage or for medical treatment caused by the accident. This Insurance policy is made mandatory in many states. In the US, Liability coverage is legal approval to drive a car. It is of less cost than other policies. If your car value is low, a third-party Insurance policy is a benefit.
Comprehensive:
The coverage policy covers theft, damage, fire, vandalism, Natural disasters, falling objects, or any damage because of animals. This policy is most likely required when you give your car for financing or leasing. It is probably different from Collision Insurance. It is for both third-party as well as own damage loss coverage. Comprehensive coverage is an extensive coverage policy.
Collision:
When you get involved in an accident, it helps the other party claim for damage or repair. It is optional and deductible coverage. Collision Damage Waiver is what the car companies or insurance agencies refer to this policy.
Uninsured and Underinsured Motorist:
Hit and run cases happen more often by drivers other than legal owners. Uninsured motorist policy makes the third party gets insurance coverage of any damage or repairs caused to the vehicle.
Underinsured Motorist policy is more likely when the driver has liability coverage, but it isn’t enough to cover the loss or damage that occurred.
Rental Coverage:
When your car is damaged and under repair, but however you need a car for your usage. This policy helps to have a rental car or any transport facility coverage. But it is not applicable on renting cars for vacations or when your vehicle has a regular service. It helps to pay for vehicles on rental or any other transportation. It doesn’t have a deductible. For collision or comprehensive coverage policies, you need to pay a deductible for any damage or repair of the vehicle.
Towing and Labor Insurance:
This policy is for minor problems like flat tires or any roadside breakdowns. This policy offers coverage on Towing, Gas or Oil delivery, Tire changes, Jumpstart. In Some instances, you cannot claim comprehensive coverage where you need towing after hitting an animal. While some Insurance covers towing as a part of the insurance coverage.
Classic Car Insurance:
When you own a classic or a vintage car, this policy helps you claim the coverage. Vintage cars and classic cars are not the same. Vintage cars are fancy and rare models, which are from the period 1919 to 1930. But finding their parts or service centers is a more challenging task. Cars from the period 1940 to 1970 are classic cars. A Classic car insurance policy covers the same as a regular auto insurance policy.
The Vintage and Classic Car Club of India (VCCI) certifies a car based on its model in India.
In the USA, GEICO provides Insurance for Classic and vintage cars. This policy has full coverage from all those mentioned above, including medical.
Best Auto Insurance Companies in the USA
- USAA
- Erie Insurance
- State Farm
- GEICO
- Travelers
- Nationwide
- Allstate
- Farmers
- Progressive
- American Family
These are the top 10 Insurance companies in the US in 2021. One needs to have military affiliations, whether active or retired, to register in USAA. But the pricing and the benefits they give makes them the best in the industry.
GEICO also has significant benefits like vintage or classic cars coverage policies too.
Consequences of Driving without Insurance
- Paying high damage loss to the third party, which might cover in the Insurance.
- Paying fine as per Motor Vehicle Act, road and safety rules, fines may vary from state to state. An average fine of 1000$ for not having insurance.
- Other than fines, there may be legal punishments involved.
- There would be no claim bonus.