15 Common Car Insurance Questions
Reading time • 11 minutes
By Matic
Car insurance is one of the most important insurance products you’ll ever have to buy. In addition to protecting you, your passengers, and your vehicle, it’s a required part of being a driver in nearly every state.
Unfortunately, car insurance isn’t always so straightforward. It can be particularly complicated if you’re buying your first ever policy, or if you’re making a switch to something new.
Below, we take a look at some of the most common questions that people have about car or auto insurance so that you’ll have the information you need to help make a decision about your auto coverage.
What is car insurance?
Car insurance is a type of insurance policy that you buy to cover yourself financially against the costs associated with getting into an accident in your vehicle.
Depending on the specifics of your policy, auto insurance can help you pay to repair or replace your vehicle, repair or replace someone else’s property or vehicle that was damaged or destroyed in an accident involving your car, cover medical bills for yourself and others, cover legal fees associated with an accident, and more.
How does car insurance work?
Car insurance works the same as most other types of insurance.
First, you must purchase a policy that provides coverage for your vehicle. You’ll then be responsible for making premium payments — either monthly, or as a lump sum. Most policies provide coverage in six-month terms, at the end of which you’ll need to either renew your policy or purchase new coverage elsewhere.
If the covered vehicle is in an accident while your policy is in effect (or you experience another event covered by your policy) you can then submit a claim to your carrier. Before your coverage kicks in, you will need to meet your deductible. Once your deductible has been met, your carrier will typically pay out against your policy, up to the maximum amount established in that policy.
An important note: Your deductible will typically reset after each claim you submit, and may vary depending on the type of claim you submit.
What does car insurance cover?
Exactly what is covered by your car insurance policy will vary depending on the type of coverage that you purchase. This can vary substantially, so it’s important to understand the terms of your policy before you buy coverage.
That being said, most auto insurance policies will include the following types of coverage:
- Auto liability coverage: Covers the other party’s medical bills and damage to their property, if you are deemed responsible for the accident.
- Collision coverage: Covers damage to your vehicle as the result of a collision.
- Uninsured/Underinsured motorist coverage: Covers you if you are in an accident with another driver who is either uninsured or underinsured.
- Personal injury protection (PIP): Covers medical bills you or your passengers incur during an accident.
- Comprehensive coverage: Covers you against types of events outside of your control, aside from accidents, such as theft, vandalism, or damage to your vehicle from falling objects.
In addition to these standard types of coverage, you may decide to purchase a car insurance rider for additional types of coverage — such as engine coverage, first accident forgiveness, etc.
What does comprehensive car insurance cover?
Comprehensive car insurance is a type of coverage designed to help you pay to repair or replace your vehicle if you experience non-collision events outside of your control. This may include damage from a fire, natural disaster, vandalism, civil disturbance, or a fallen object such as a tree branch. It also typically provides protection against theft.
If you are financing your car, your lender may require you to carry comprehensive coverage — and the same requirement may apply if you’re leasing a vehicle.
What does car insurance not cover?
While coverage can vary significantly depending on the specifics of your policy, most auto insurance policies will not cover:
- Wear and tear to your vehicle
- General maintenance
- Custom parts and modifications
- Routine repairs not associated with a covered event
- Personal belongings stolen out of your car
- Damages exceeding your policy’s maximum amount(s) of coverage
- Intentional damage (i.e., insurance fraud)
- Injuries sustained by pets in your vehicle
- Commercial use (such as if you use your vehicle for rideshare or delivery)
- The difference between your car’s actual cash value and the balance of your car loan
In many cases, you can purchase riders that include coverage for some of the situations discussed above. Gap insurance, for example, would help you pay off the balance of your car loan even if your car’s actual cash value (after depreciation) is below this amount.
Do you need car insurance?
Generally speaking, yes. In the US, all but two states require drivers to carry a minimum amount of auto liability coverage. Additionally, certain states require drivers to carry uninsured/underinsured motorist coverage. This minimum amount varies from state to state.
The only two states where car insurance is not required are Virginia and New Hampshire. That being said, these states do have other requirements in place for drivers who decide to forego insurance, and there are exceptions.
How much car insurance do you need?
As a rule of thumb, the bare minimum amount of auto coverage that you can get by on is the amount required by your state. According to Progressive, most states require you to carry liability coverage of $25,000 in bodily injury per person, $50,000 in total bodily injury per accident, and $25,000 in property damage per accident.
It’s important to note, though, that these minimums will not typically be enough to cover all of the costs associated with a serious accident. With this in mind, most drivers are well served by purchasing coverage above their state minimums.
You may want to consider purchasing enough liability coverage to protect all of your personal assets, in case you are deemed responsible for causing an accident. This should include the value of your savings, investments, home, and other vehicles.
Can you get car insurance without a car?
Yes. In fact, if you’re currently buying a new car, you’ll need proof of insurance before you are able to drive that car home. As soon as you’ve made the decision to buy a particular car, you can purchase coverage for the vehicle.
Likewise, there are certain car insurance policies for individuals who don’t own their own vehicle, but who drive regularly. This is known as non-owner car insurance. Importantly, non-owner car insurance typically only provides the driver with liability coverage.
How much does car insurance cost?
According to Matic research, the average car insurance policy in 2022 and early 2023 costs $1,808 per year.*
That being said, it’s important to note that a lot of factors go into determining the cost of your policy, and costs can vary significantly. Some important factors that influence the cost of your policy include:
- The age, make, and model of your vehicle
- Your age
- Your gender
- Your driving record
- Your location
- Your credit score
- How much you drive (mileage)
- How many years of driving experience you have
- The carrier you choose
- The types of coverage you choose
- How much coverage you choose
- The size of your deductible
- and more
Which car insurance is the cheapest?
Generally speaking, the cheapest possible option will be to purchase the minimum amount of coverage required by your state. In most cases, however, this will not be enough to truly protect you if you’re in a serious car accident.
If you want to get a good deal on car insurance but also want to feel protected, your first step should be to determine how much coverage you need. Then, you can comparison shop between multiple carriers to get a good deal.
Where can you buy car insurance?
When it comes to actually buying auto insurance, you have a number of options to choose from. These include:
- Through the dealership: If you are purchasing a vehicle from a car dealership, they may be able to offer you coverage through one of their partners.
- Directly from a carrier: If you already know which carrier you would like to purchase coverage through, you can contact them directly through their website, phone number, or a licensed agent.
- Through an insurance agent: Insurance agents are professionals who help you purchase coverage. Some agents only work with a single carrier; some work with multiple. In either case, an agent can help you purchase coverage.
- Through an online platform or marketplace: A number of insurance platforms exist, such as Matic, to help you comparison shop and find coverage. Working with an online marketplace helps you save time and can even save you money — since you don’t have to research prices and coverage options on your own.
Matic is a digital insurance marketplace that helps you find the right insurance option for you from a network of more than 40 A-rated insurance carriers — plus, we’re backed by an agency of licensed advisors to help you navigate the insurance process and answer any questions you might have.
How to save on car insurance
Auto insurance is a necessary part of owning a car. But just because it’s necessary doesn’t mean you should overspend. In fact, there are many ways that you can potentially lower your costs and save on your premiums.
First, it’s important that you don’t simply settle for the first policy you’re offered. If possible, you should comparison shop by requesting quotes from multiple carriers (Matic helps you do this by automatically comparing coverage from more than 40 carriers). That way, you’ll be in a good position to choose the best coverage for the lowest rates.
Second, once you’ve chosen a carrier, you should inquire about any discounts that you might qualify for. Most carriers offer a number of discounts, which can often significantly lower your bill. Some of these discounts include:
- Paperless discounts
- Loyalty discounts
- Early quote discounts
- Multi-car discounts
- Multi-policy discounts
- and more
Here at Matic, our goal is to make it as easy as possible for you to buy the coverage you need. All you need to do is answer a few questions, and in less than a minute you’ll be paired with a personalized quote.
Other FAQs about coverage
Does car insurance cover theft?
If you have comprehensive coverage, then yes: Your policy will cover theft of your vehicle. It’s important to note, however, that theft of personal belongings stored in your car is not typically covered.
Does car insurance cover rental cars?
Generally speaking, yes. If comprehensive and liability coverage are a part of your personal policy, then in most cases they will carry over to your rental car.
That being said, this coverage will only extend to the coverage limits in your policy. If you are renting a car that is much more valuable than your personal car, you may find that your policy doesn’t provide enough coverage — potentially leaving you on the hook to pay for damages.
Before purchasing (or deciding to forego) rental insurance, contact your carrier to see what coverage extends to your rental car, just to be safe.
Does car insurance cover windshield replacement?
It depends.
If you have collision coverage under your policy, and your windshield is damaged during an accident, then yes, it will typically be covered under your policy.
If you have comprehensive coverage and your windshield is damaged during a non-collision covered event (such as a fallen tree limb), then it should also be covered under your policy.
Of course, you will first need to meet your deductible before coverage kicks in.
Does car insurance cover repairs?
If your car is damaged due to a covered event, then yes, your policy will help you pay for repairs once you have reached your deductible. What qualifies as a covered event will depend on the types of coverage you carry. Collision coverage kicks in for damage caused by a collision; comprehensive coverage kicks in for damage caused by non-collision events.
That being said, your car insurance will typically not cover repairs that are made necessary from mechanical breakdown, general wear and tear, or routine maintenance.
*Average cost of insurance is based on auto insurance policies sold by Matic between January 1, 2022, and February 28, 2023.
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