Approximately 58.4 million millennials, or 80% of the 73 million millennials in the US, are car owners.1. It’s likely that if you’re a millennial, you’ll need auto insurance at some point, as 49 of the 50 states have legal requirements for it (New Hampshire is the exception). New Hampshire Department of Insurance State. “Your Guide to Understanding Auto Insurance in the Granite State,” Choosing the appropriate auto insurance can be difficult. Not only do state regulations differ, but insurance firms also provide a variety of coverage options, which further complicates matters. Furthermore, millennials frequently pay more for auto insurance than do older drivers; individuals in their 20s typically pay the highest premiums. We’ll go over the many kinds of coverage in this tutorial, as well as some easy methods to utilize to find the best vehicle insurance for your needs and budget.
IMPORTANT NOTES
- Except in one state (New Hampshire), having auto insurance is mandated by law.
- If you are hit by a hit-and-run driver, someone without insurance, or someone who is underinsured, you are covered by uninsured or underinsured motorist coverage.
- Property damage, comprehensive coverage, collision, and bodily injury liability are further forms of coverage.
- You can qualify for lower insurance costs if your vehicle has contemporary safety features.
- Examine your state’s regulations for coverage and determine the kind and amount of coverage you require depending on your driving style, age of vehicle, and current financial status to ensure you don’t overpay for coverage you won’t use.
Highway Collisions and Insurance
Based on the most recent data available, the National Highway Traffic Safety Administration reports that there were over 6.10 million traffic crashes in the United States in 2021. These incidents cost drivers a lot of money, which exacerbates the situation. The average amount of a collision claim in 2022 was $5,992. Could you afford to cover that cost with cash? Even with flawless driving abilities, mishaps do occur. Imagine if an oak tree topples over your parked car. What happens if a freeway pileup crumples your hybrid? An incident like this could throw you into financial ruin if you don’t have auto insurance. It’s critical to consider auto insurance to be worthwhile, so continue reading to choose the kind of coverage you require.
Coverage for Underinsured and Uninsured Drivers
In the event that an uninsured motorist or a hit-and-run driver strikes your car, uninsured motorist coverage will cover the cost of repairs. It also pays for all of the passengers in your car’s medical expenditures, agony and suffering fees, and, in the worst situation, burial costs. In several states, having this kind of coverage is required.
Insurance Against Collisions
Collision coverage assists in covering the cost of auto repairs if you are involved in an accident. Your insurance provider will likely give you a cheque for the full worth of your car instead of covering the cost of repairs if the repairs exceed the value of your car. It is imperative that you obtain collision insurance if your vehicle is new or almost new.
Liability Insurance for Physical Injury
This insurance pays for medical care, rehabilitation costs, funeral costs, legal fees, and pain and suffering charges if you are in an accident that injures someone else. It provides coverage for wounded pedestrians as well as other drivers’ and passengers’ autos. The majority of states need this kind of coverage, and each state has its own minimum requirements.
Liability for Property Damage
This includes property damage as well as harm you inflict to other cars in the event of an automobile collision. Let’s imagine you crash into someone’s fence when you swerve to avoid a dog or a deer. Liability insurance for property damage will contribute to the cost of replacing or repairing the fence. Nevertheless, your car’s damage is rarely covered by this coverage. You’ll need collision coverage in order to cover such costs. All states need property damage liability, and each state has a different minimum coverage amount. For instance, Florida has a $10,000 minimum coverage requirement, but Ohio has a $25,000 minimum.56Nevertheless, given that the average price of a new automobile is $48,334 according to Kelley Blue Book, these minimum requirements typically don’t provide you with enough coverage to adequately safeguard you. Find out how much property liability coverage you require by speaking with your insurance provider.
Entire Coverage
You could think that since the coverage is all-inclusive, this is all you need when you see the word “comprehensive.” However, that isn’t the truth. (Yes, there are deceptive terminology in auto insurance.) Comprehensive insurance covers any harm to your vehicle that does not result from an accident. This includes damage from animals (you hit a deer), falling things (imagine objects flying off the back of vehicles on the highway or trees toppling on your car), theft, vandalism, rioting, fire, and natural disasters (think storms, floods, and tornadoes). If your automobile is stolen, along with its contents, this insurance will also cover you. This kind of coverage is required by many lenders. Ask the lender if comprehensive coverage is necessary if you still owe money on your automobile or if you are leasing a vehicle.
Prices of New and Old Vehicles
Given that they are typically worth more, you might assume that insurance for new cars is more expensive. This isn’t always the case, though. One factor that affects auto insurance prices is the likelihood of damage to your vehicle. Because new cars are built with cutting-edge safety measures, insurance for them is generally inexpensive, which contributes to reduced premiums. The likelihood of it being harmed in an accident is reduced when your car has more contemporary safety features.
On the other hand, you might not require a lot of insurance if you currently possess a much older car that is paid for. Liability insurance is definitely something you’ll need to have (especially if your state requires it), but collision and comprehensive coverage might not be worth the money, particularly if you can afford to have your car fixed or replaced. Even if your car is totaled, the premiums you would pay over time will likely be greater than the reimbursement if it is worth $5,000 or less.
When Leasing, Auto Insurance
The dealer may insist on gap insurance if you’re leasing a vehicle. This coverage covers the difference between the car’s worth and the amount you still owe on your lease in the event that you get into an accident or your car is stolen. Before you buy this coverage on your own, thoroughly review your leasing contract as some leases provide it without charging extra. On a leased vehicle, you might additionally need to keep liability and collision insurance. Since the leasing company owns your car, it wants to ensure that its investment is protected in the event that the vehicle is stolen or destroyed.
The Final Word
Auto insurance is a need whether you drive someone else’s vehicle, lease your own vehicle, or both. In addition to the fact that most states need specific kinds of coverage, having the appropriate kind of auto insurance could spare you from financial ruin in the event that your vehicle is stolen, destroyed, or—worse yet—if you cause an accident that injures you or another person. While purchasing auto insurance is necessary, avoid paying too much for unnecessary coverage. Check the coverage requirements for your state and determine the kind and amount of coverage you require based on your driving style, age of vehicle, and present financial status. To find the finest deal, it’s also crucial to compare prices. Get estimates from many auto insurance providers to determine which coverage best suits your needs and financial situation. Comparing insurance quotes is crucial if you’re under 25 because, statistically speaking, young males are more likely than older friends or family members to have an accident. This makes you pay more for insurance.
