Auto insurance provides financial security against the possibility of an expensive accident, from covering medical and repair bills after an incident to covering legal costs if someone sues over what occurred.
The top auto insurers provide competitive prices and excellent customer service, taking into account factors like your driving record, credit score and whether or not you own multiple cars.
Types of coverage
Auto insurance policies contain various types of coverages that may be included. Liability and collision are usually required by most states; medical payments coverage (for uninsured drivers) may be optional or offered as add-ons; roadside assistance, rental reimbursement and gap coverage can all be found as add-ons as well.
Medical Payments Coverage, commonly referred to as Med-Pay, pays for your and your passengers’ medical expenses after an accident regardless of who was at fault. It also covers limited funeral costs and lost wages, though its limits tend to be lower than PIP coverage in some states.
Comprehensive car coverage (sometimes referred to as UIM/UM) acts like PIP but for your car. It covers damage caused by factors other than accidents – like weather, theft, vandalism, falling objects and animal damage. Furthermore, comprehensive policies usually come with a deductible payment requirement.
Your auto policy offers you the ability to share risk by choosing higher deductibles – those with larger deductibles will typically see reduced premiums.
Insurance professionals advise choosing a deductible amount you can comfortably afford in case of an incident, while taking into account whether your lender requires comprehensive and collision coverage – and, if necessary, what their deductible requirements may be.
Some companies provide an insurance product that features a diminishing deductible feature that gradually lowers your deductible over time as long as you remain accident- and violation-free. While this could save money over time, it might not suit every driver – although you can always change both your deductible and policy limits at any time.
Limits refer to the maximum amount your insurer will cover in any one claim, expressed as three numbers such as 100/300/100 for bodily injury and property damage claims respectively. It may also be possible to purchase combined single limit policies which set aside one dollar as coverage in case any type of claim arises.
When selecting liability limits, it is a good idea to carefully consider your financial status and assets. If you own property such as a house and vehicles and possess substantial savings accounts, higher limits than state minimums could prove invaluable should a serious accident occur and be held responsible. Although extra protection might cost more, it could prove well worth its cost in terms of legal claims filed against you in court.
As younger drivers are more likely to get into accidents, they are often considered higher-risk drivers and quoted a higher premium. However, they could save on car insurance by qualifying for discounts.
These could include good student discounts, student-away-at-school discounts and driver training courses. Furthermore, increasing deductibles on comprehensive or collision policies could also help to bring down rates.
USAA car insurance for young drivers stands out amongst its competition thanks to its affordable premiums for teenage drivers and other discounts, making the policy more cost-effective than most competitors. Furthermore, USAA offers additional coverage like roadside assistance and loan/lease payoff protection as well as extra telematics programs measuring acceleration, braking and idle time that reward good driving behaviors with up to 10% discounts.
Add a teen to your policy
Many insurance providers require you to add any drivers living in your household who are of driving age to your policy. While adding teens will increase the cost of premiums, shopping around for the best rate calculation could pay dividends – each insurer has their own set of formulae and calculations.
One effective strategy to lower your teen’s rate is through good grades, which can save up to 25% and last until they turn 25. Other ways of cutting costs may include decreasing coverage (dropping comprehensive and collision), keeping high liability limits in place and considering an umbrella policy to provide extra protection from large claims.
As soon as your teenager obtains their permit or starts driving, add them to your policy immediately. Otherwise, should an accident occur, coverage could be denied on grounds of fraud as you failed to inform them that they were covered drivers.