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Why You Need Auto Insurance?

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March 2007
Why You Need Auto Insurance?

Each year, more cars and drivers hit the highways. With so many vehicles on the road, crashes will happen. Automobile insurance can be the difference between a minor inconvenience and a major hassle. But why do you need insurance and just how much should you buy?

Auto insurance protects you by paying for damage or injury you cause others while driving your car, damage to your car or injury to you or your passengers in your car from a crash, plus certain other occurrences, such as theft.

Auto insurance is required by law in all states and provinces. Without insurance, you risk having to pay the full cost of any harm you cause others or of repairing or replacing your car if it is damaged or stolen.

Coverage requirements vary by state/province but usually include the following:

Liability: It pays for damages due to bodily injury and property damage to others for which you are responsible. Bodily injury damages include medical expenses, lost wages and pain and suffering. Property damage includes damaged property and loss of use of property. If you are sued, it also pays your defense and court costs. State laws usually mandate minimum amounts, (what's the minimum amount in Georgia?) but higher amounts are available and usually recommended.

Personal injury protection: This is required in some states and is optional in others (is it required in Georgia?). It pays you or your passengers for medical treatment resulting from a crash, regardless of who may have been at fault, and is often called no-fault coverage. It may also pay for lost earnings, replacement of services and funeral expenses. State law usually sets minimum amounts. (Georgia?)

Medical payments: This coverage is available in non-no-fault states (is GA non no-fault?); it pays regardless of who may have been at fault. It pays for an insured person's reasonable and necessary medical expenses for bodily injury from a crash, and for funeral expenses.a

Collision: This pays for damage to your car caused by collision.

Comprehensive: This applies if your car is stolen or damaged by causes other than collision, including fire, wind, hail, flood or vandalism.

Uninsured motorist: This pays damages when an insured person is injured in a crash caused by another person who does not have liability insurance or by a person who cannot be identified (usually a hit-and-run driver).

Underinsured motorist: This pays damages when an insured person is injured in a crash caused by another person who does not have enough liability insurance to cover the full amount of the damages.

Other coverages, such as emergency road service and car rental, are also available.

What you pay for auto insurance will vary by company and will depend on several factors, including:

? What coverages you select,

? The make and model of the car you drive,

? Your driving record,

? Your age, sex and marital status and

? Where you live.

Many people think of auto insurance as a necessary evil, but it can save your financial well-being. Evaluate your needs, do your research and with the help of your insurance agent make the decision that best suits you.

Ways to Reduce Your Auto Insurance Premium

If you're like me, you're always looking for a smart way to save money. Sometimes, saving money can come in the most unlikely place – such as your insurance.

There are several ways you may be able to cut your auto insurance costs. Higher deductibles can lower your premium as will selecting only the coverages you feel you need. Many insurance companies offer different discounts. Here are a few. When shopping for auto insurance, be sure to ask about the availability of these discounts and whether the insurer offers them.

? New business discount: May offer you a discount as a new policyholder if you have been accident-free for a specific period of time.

? Accident-free: Policyholders who have been accident-free while being insured with the same insurance company for several years may be eligible for reduced premiums.

? Discounts for other insurance lines: Premiums may be reduced if you insure your home, life or health with the same company that covers your car.

? Multiple cars: Premiums may be reduced if there are two or more private passenger cars in the household insured by the same company.

? Air bag/passive restraint: Cars that are 1993 or older and are equipped

with air bags or automatic seat belts may receive this discount. Certain makes and models of newer vehicles may receive the Vehicle Safety Discount because of the lower medical payments associated with them. The Vehicle Safety Discount is for autos 1994 or newer. Certain makes and models may have a decrease in their premiums because of lower medical payments associated with those specific makes/models.���

? Antitheft devices: Some insurance companies offer discounts on comprehensive coverage premiums when certain antitheft devices are installed or built into a vehicle.

? Defensive driving course: Premium discounts sometimes are offered for the voluntary completion of specified driver improvement courses.

? Good student: Full-time students (high school or higher level) maintaining at least a "B" average may qualify for reduced premiums with many companies.

These are just a few of the common discounts offered by insurance companies. For more details contact your insurance company or agent. Above all, drive safely.

By Priya Tybaert

Licensed Agent

State Farm� Insurance Company


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