Car insurance provides financial protection and peace of mind for drivers. It can help pay for costs resulting from accidents or other covered events. Without insurance, drivers can face hefty out-of-pocket expenses in the event of a claim. Here’s how car insurance works, and how you can even save on coverage.
Why car insurance is important for all drivers
Car insurance is a contract between the policyholder and an insurance company. It provides financial protection against losses related to owning or operating a vehicle.
A car insurance policy is made of several different coverages that help pay for expenses if you get into an accident.
Most states require car owners to buy at least a minimum amount of car insurance coverage. Even if there were no legal requirements, if you own a car, you should have car insurance. It can help protect your assets and future income in the event of an accident.
What car insurance covers
Liability coverage
There are two types of liability coverage provided by auto insurance – bodily injury liability coverage and property damage liability coverage. Bodily injury liability coverage protects you if you’re held responsible for injuring another person. It helps pay for their medical expenses. Property damage liability coverage helps you pay for the damage you caused to another person’s property.
Collision and comprehensive coverage
These are optional coverages that help pay for damage to your own vehicles. Collision coverage helps pay for the cost to repair or replace your vehicle when it hits another car or stationary object, or is hit by another car. Comprehensive coverage protects your car from damage not related to a collision, including damage from fire, flood, wind or animals.
Personal Injury Protection and Medical Payments coverage
These coverages help pay for medical expenses for you and your passengers after an accident. Personal Injury Protection can pay for additional related expenses, like lost wages.
Uninsured/underinsured drivers
Uninsured and underinsured motorists coverage help pay for injuries you or your passengers sustain as a result of an accident caused by an uninsured driver or a driver who does not have enough liability coverage. This coverage may also pay for injuries resulting from a hit-and-run accident where the responsible party cannot be identified.
What’s not covered
Car insurance will only cover the situations you bought coverage for. For example, if your car is damaged by a flood, but you did not purchase comprehensive coverage, your insurance won’t cover the damage.
There are situations that are generally not covered by most insurance policies. Wear and tear, damage caused by racing or contests of speed, intentional damage and damage caused by non-covered drivers are not typically covered in a car insurance policy.
Each car insurance policy is different. Review your policy documents or speak with your insurance company for more information.
How do claims work?
The first thing you should do after an accident is to make sure everyone is safe. Confirm that your passengers are okay, and then check on the passengers in the other vehicle. Dial 911 if anyone requires medical attention. Don’t move an injured person unless they are in immediate danger.
Whether you’re involved in a minor accident or a major collision, it’s best to alert the police immediately and ask them to file a report. A police report is invaluable to the claims process.
Record the location, date and time of the accident, along with the names, addresses, phone numbers and the license plates of the vehicles involved. Injuries of anyone involved in the accident should also be recorded.
Then, document the accident scenes by taking photos of all vehicles involved from every angle. In your photos, include any hazards, skid marks and damages.
Filing a claim
- File your Claim
Please have your policy number ready. You can file a claim online or by phone. - Assignment and Tracking of the Claim
After you report your auto insurance claim, you’ll receive a claim a number. We’ll also assign you a friendly personal representative to walk you through your policy coverage. - Damage Evaluation
If your vehicle has damage and the applicable coverage applies, we offer these super-convenient options to get you back on the road:- CarPics® Photo Appraisals
Submit your eligible claim* quickly and easily by submitting photos from your phone. Receive your estimate in a few hours, and you may even get paid that same day. - Crashbusters Mobile Claim Service
Have a representative meet you to appraise the damage at a time and place that’s convenient for you. - Door to Door Valet Claim Service
Let us pick up your car and handle the repair process from start to finish. If you have rental coverage, we’ll even coordinate a rental car.
- CarPics® Photo Appraisals
- Have your car repaired
If you get repairs from one of our 100% Guaranteed Repair Shops, we’ll guarantee the work for as long as you own or lease your car. - Receive your claim settlement
Based on your situation, Plymouth Rock may pay your claim to the repair shop. We may reimburse you directly via Zelle, direct deposit to your bank account or a paper check in the mail. Your claim payment will be based on the terms and coverage in your car insurance policy.
Coverage minimums
In each state that requires car insurance, there are minimum coverages every driver must meet. In general, liability insurance is required for car insurance policies. Medical coverage, like MedPay or PIP, may also be required depending on the state.
Optional coverages
Comprehensive and collision coverage are not required by any state’s insurance regulations, but may be required as a condition of a loan or lease. While these coverages are optional, they are highly recommended to protect your vehicle from damage.
How rates are set
Car insurance rates are based on the amount and types of coverage you buy, and your individual risk factors. Risk factors may include the type of vehicle you driver, the age of the vehicle, your years of driving experience, your accident history, and other drivers in your household.
Deductibles explained
A deductible is your share of the cost to repair your vehicle after a covered accident, before your insurance will start paying. You need to pay your deductible before your insurance kicks in. Most insurers offer different deductible levels. Choosing a low deductible means you will pay less in the event of a claim, but more for your insurance premium. On the other hand, choosing higher deductible will lower your policy’s premium but require you to pay more in the event of a claim.
How to save money
Bundling
Getting home insurance from the same place you get your auto insurance from can help you save on both. It’s also convenient to have all of your policies from the same carrier.
Manage deductibles
A great way to save on your insurance premium without compromising on coverage is to raise your deductible. Keep in mind that a higher deductible means you pay more out of pocket in the event of a claim.
Conclusion – How does car insurance work?
Car insurance is essential for drivers. It protects against liability and can help pay for medical expenses and vehicle repairs. Understanding the different coverage types and policy limits can help you stay protected.
Now let’s talk about you
Do you have the right coverage for your vehicle? We’d love to chat with you about it. Call us at 800-516-9242 or speak to a local agent.
If you’d rather not talk, you can get a quote quickly and easily online. Just enter your ZIP code to get started and see how much you could save!
*Some restrictions apply.