TI - Insuring Your Car Lesson

CTAE_FLLessonTopBanner.png Insuring Your Car

image of car collision Auto insurance is required by nearly every state. An automobile accident can be financially devastating if it involves serious injuries and/or damage to the vehicles. By carrying auto insurance, drivers protect themselves and others from bearing the burden of unexpected costs due to an accident, vandalism, or fire.

Like all types of insurance, auto insurance policies cost money. The factors that affect the price you will pay for auto insurance are listed below.

  • Driving record (good record = lower rate, bad record = higher rate)
  • Driver's age (younger drivers have more accidents, so their insurance costs are higher because they pose a greater risk to the insurance company)
  • Where you live (key factors include crime and accident rates in your area)
  • Make/model of your vehicle (sports cars and luxury cars increase rates)
  • Deductible (choosing a higher deductible will generally decrease your premium payment but means you pay more out of pocket in the event of a claim)
  • Claims history (making several claims in a short time period could raise your premium)
  • Payment history
  • Type of coverage selected

In addition, a rider insurance policy is one that can be purchased to cover expensive items like instruments or jewelry that may not be covered by the main policy. Endorsements can be added on existing policies for things such as roadside assistance or rental and towing.

There are several major types of auto insurance summarized for you in the chart below. Study the chart to familiarize yourself with the various types of auto insurance, noting which are required and which are optional.

Sample Auto Policy Interactive

 

As a young driver, your premium will typically be higher because drivers age 16-24 are typically involved in more accidents than more experienced drivers. To help lower the cost of auto insurance premiums, some insurance companies offer young driver discounts for taking certified driver's education courses or maintaining good grades in school. 

Auto Policy Self-Assessment

 

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