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What is Auto Insurance?
An auto insurance quote is a price estimate of how much you will pay for a policy, based on the information you've provided about yourself, your age, your car, where you live, and so on. Auto insurance quotes are as accurate as of the information you provide.
The more accurate information you're willing to share about yourself, the closer your insurance quote will be to the actual price of a policy. Although, insurers assess risks differently and each use their unique formula to calculate a car insurance quote. So even if you provide the same information to different auto insurers, no two quotes will be the same. View Related articles
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How Does Auto Insurance Work?
Auto insurance companies use many different criteria to evaluate an insurance application via a process called underwriting. Each car insurance company has guidelines regarding which groups of drivers they want to accept and how much they will charge the groups they consider a greater risk. The guidelines are different for each company, meaning that two companies comparing the same driver can arrive at vastly different conclusions.
Before you get a quote, the insurance company is going to do a little digging about you. During the underwriting process, you will be placed in a group with other applicants based on how much money and how many claims the insurance company believes it may have to pay.
At this time, the insurance company will look at things like your driving history, whether you’ve been in a lot of accidents, your age, gender, and a bunch of other demographic factors. These factors vary from insurance company to insurance company.
What does Auto Insurance Cover?
There are two types of liability coverage — bodily injury and property damage. The first covers costs associated with injuries following an accident; the other covers costs associated with damage to personal or business property.
Uninsured Motorist Bodily Injury
Uninsured motorist coverage helps pay for medical bills and damage to your vehicle if you’re in an accident with an uninsured (or underinsured driver), and they’re at fault.
Personal Injury Protection
If you or your passengers are injured in an accident, personal injury protection helps cover medical bills and lost wages. If the accident is fatal, it may also pay for funeral expenses.
Medical Payments Coverage
It helps pay for medical bills you or your passengers incur because of an accident, regardless of who was at fault, just like personal injury protection.
Collision coverage helps pay for damages stemming from an accident. It includes damage to your vehicle if you hit another car or a stationary object such as a fence, lamp post, or telephone pole. It's optional, but lenders often require it if you finance or lease your vehicle.
Comprehensive coverage helps pay for damages related to things other than accidents such as theft, natural disasters, falling objects, and contact with an animal. Like collision coverage, it's optional, but your lender may require it if you finance or lease your car.
SHOULD I PAUSE OR CANCEL AUTO INSURANCE?
If you own a vehicle, auto insurance is likely something that you’ve been paying for every month. Canceling or suspending car insurance became more common during quarantine with people working remotely and not needing to commute or even drive as much as they used to
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