Everything You Need to Know About Auto Insurance in the USA
Having a car in the USA is not a luxury, but a necessity, especially in small cities where public transport is much less developed than in megacities. ForumDaily previously talked about how to buy a car in the States . However, at the same time with the car, it is necessary to purchase a car insurance policy. What insurance to take, and what does its cost depend on? ForumDaily prepared the answers.
Marat Kamenev has been living in California with his wife for 2 years. The family has 2 cars – Toyota RAV4 2014 release and 1999 Toyota Corolla.
When making insurance, driving experience and driver age are very important. At that moment, when Marat and his wife bought a policy, they were 33 and 34 years old, respectively. Marat had driving experience of 10 years, his wife – 6. Guys live in a calm and safe area, which does not increase the cost of insurance.
Both cars are insured by Farmers. For insurance, the couple pays $ 141 per month ($ 846 for six months). Car insurance limits can be seen in the table below:
California State Policy Limit Example
Last year, when he returned from a vacation on Lake Tahoe, Marat hit a stone in the windshield of a car, as a result of which the windshield had to be replaced. Marat appealed to the insurance company, reporting the incident. The glass was replaced within a couple of days, out of his pocket, Marat paid $ 100, since his insurance was deductible. This incident did not affect the further cost of insurance.
In general, the following factors affect the cost of car insurance:
– gender and age of the car owner;
– his marital status;
– driving experience in the USA (in the world);
– the area in which your vehicle will stay overnight;
– insurance limits;
– franchise (deductible). It reduces the cost of insurance if you decide that in the event of an emergency you will partially compensate for the damage yourself. For example, if you decide that your deductible deductible is $ 500, then in the event of an accident that will cause you $ 3,000 damage, you will be reimbursed only $ 2,500, the rest $ 500 you have to pay. And in the event that you scratched the bumper during parking and repairs ended up costing $ 300, you do not need to contact the insurance company. That is, the franchise essentially reduces the total cost of the insurance policy, and the more it is, the lower the cost of insurance.
Ruben Alishaev has been living in the USA for 14 years. Now – in the state of New York in the safe “Russian” district of Queens Rego Park. Ruben has a 2016 Infiniti QX60 leased. 2 drivers are insured in the insurance for the car – Ruben himself and his dad Joseph. Drivers age 31 and 65, respectively, driving experience 13 and 12 years. The main driver is Ruben, the second is his father, although in fact it is the father’s car.
But for an insurance company, Ruben looks like a more reliable driver, because he has a better credit history and, unlike his dad, there are no penalty points for driving. Insurance of this car costs Ruben about $ 2000 per year. The car is insured by Geico.
In general, insurance is more expensive in New York than, for example, in California. But at the same time, a driver living in a village in upstate New York will pay less than a resident of Los Angeles or San Francisco.
For example, 36-year-old Alisa Savelyeva from the city of Galloway in the state of New Jersey, together with her husband own a 2006 Mercedes Benz C230 and a 2016 Toyota 4Runner.
Each car has insurance, at the time of registration of which the drivers had a driving experience of 12 and 6 years, respectively. For both cars insured by Geiko, the couple pays $ 981 for six months.
In addition, even the results of the insurance company’s own financial activities may affect the cost of insurance. So, if she had significant losses in the previous year, then she was forced to just so, without other reasons, raise insurance prices in order to stay afloat.
In New York, insurance is more expensive than, for example, in California. Photo: depositphotos.com
Difference in approaches
The issue of car insurance in the United States is becoming more complicated due to the fact that the country does not have a federal system that regulates this industry. Each state independently engages in the formation of requirements for car insurance.
However, in this regard, all states can be divided into 2 categories:
- No matter who is to blame, the damage caused to you is covered by your insurance (no fault). This type of insurance is common in 12 states – in Florida, New York, Michigan and others.
- Responsibility lies with the culprit of the accident (in English it is called at fault). This is how they work in 38 states, including California and Washington.
Car insurance can be bought in person or online at an insurance company, from an insurance agent or broker (the latter must have a license). Insurance is issued for a period of 6 or 12 months. It can be paid on a monthly basis, or can be a single amount, for which they often give a discount. With annual insurance, the price is guaranteed not to rise, with 6-month policies they can raise the price every six months.
Often, insurance companies offer very favorable conditions for new customers. However, in good insurance companies there are also discounts that are offered to regular customers with long-term cooperation.
What you need for car insurance
When making insurance, you will be asked to provide the following documents and data:
- American driver’s license (in the absence of it – those rights that are). If you do not have a local driver’s license, this does not mean that you will not be able to insure. Most likely, insurance will be a little more expensive than if you were with local rights. The main thing – do not forget to inform your insurance broker about their receipt;
- VIN (Vehicle Identification Number);
- Brand, model and year of manufacture;
- Zip code of the place where your vehicle will stay overnight. Each insurance company has its own rating of safe areas. Accordingly, the more incidents happen where you live, the more expensive your insurance will be.
There is also another item that must be indicated on insurance – the estimated number of miles you plan to drive per year. This data is provided in the form of a letter in free form. Some insurance companies ask to present papers annually reflecting the real situation. And if it suddenly turns out that you are greatly underestimating the data, then you may be required to claim compensation for the last 3 years. In general, it should be borne in mind that any fraud with car insurance is a federal crime and it is punishable accordingly.
Each state has its own insurance rules. Photo: depositphotos.com
What insurance consists of
The insurance policy is a set of various kinds of coatings. In the field of car insurance, there are many. Consider some of them.
Liability Coverage – compulsory civil liability. The most important coverage, especially for states where all responsibility lies with the culprit.
It must be borne in mind that if in the event of an accident with serious damage to cars, the insurance of the culprit of the accident will not cover all the costs, the court will demand the missing amount from it. And all family bank accounts, owned property, shares, if any, and the amount of 25% of the money earned by all family members in the next 10 years will go to cover it.
That is why, when insuring a car, it is worth imagining the worst and insuring yourself enough to be sure that tomorrow you will not be taken away.
Insurance broker and lawyer Diana Motsenat tells an incredible story about what surprises can be waiting for drivers on the road.
“The couple went on a trip to Ohio. We drove in the “house on wheels”. One day, they got a wheel pierced, but they noticed it only when sparks from the contact of the wheel rim and asphalt had already started, ”she says. – As a result, the field located next to the highway caught fire from the spark. The damage was estimated at $ 3 million. $ 300 thousand was covered by their insurance, and the rest they had to pay out of their pocket. “
Medical Coverage / Personal Injury Protection – This is mandatory in some states, such as New York and Florida, and completely optional, for example, in California.
But those who live in states where this coverage is not necessary should consider including it in the insurance, because these funds are issued instantly, regardless of who is to blame for the incident. Moreover, a good insurance broker will certainly advise you to draw up such coverage, because with it you will be protected in case of injury. While the trial is ongoing, who is right, who is to blame, you need to get medical help – and you can take money for this from this coverage.
And here are 2 more types of coverage that should be included in your insurance policy – they will provide protection in the event that you encounter a person on the road who does not have insurance or does not have enough insurance.
Uninsured Motorist Bodily Injury / Underinsured Motorist Bodily Injury – This cover is responsible for bodily and moral damage, and Uninsured Motorist Property Damage covers damage from vehicle damage.
Since many factors affect the cost of the policy, the most correct decision on the issue of insurance is to find a professional broker who will help you choose exactly the policy that you need.
To minimize risks, you should contact only licensed insurance agents or large insurance companies. Do not fall for low insurance prices, as often they mean immediate benefits and a possible big loss if something unpleasant