If you’re the parent of a teen and you are now looking to insure them, it’s still a good idea for the teen to learn about the basics of car insurance.
First, what does automobile insurance protect against? Auto insurance protects you against any loss that you might incur as a result of being involved in a car accident or having your car stolen, vandalized, set on fire or any other number of incidents. It’s a contract between you and the insurance company where you agree to pay premiums in return for which the insurer agrees to compensate you in case of loss. Inside of this simplistic description of course is a lot of fine print but were just covering the basics here.
What typical options are available to a driver when it comes to auto insurance?
Bodily Injury – protects you from financial loss in the event that you cause someone else injury.
Property Damage – financially covers you cause to someone else’s property.
Collision – similar to property damage but this one covers damage to your property.
Uninsured/Underinsured Driver – covers you in the situation where you suffer damages caused by a non-insured or under-insured driver.
Medical – in case of injury in an accident that results in the need for medical care this insurance will pay for all or some of your expenses.
Beyond the kinds of coverage you can get, the next most important concept to understand is the deductible. The deductible is the amount that you have to pay on any claim before the insurance company has to start to pay. For example, if your deductible is $1,000 and you are in an accident that results in $700 of damage, the insurance company will not have to pay you anything. If the damages are $1,500 then you would pay the first $1,000 and the insurance company would compensate you for $500.
When reviewing your insurance policy you should normally find several sections, each of which serves a specific function, however, make sure you review the Policy Declarations which spell out the details of your coverage and the Policy Exclusions which highlights what is excluded from coverage.
Armed with these basics you should now be in a better position to review your current policy and start shopping for some cheap insurance for young drivers.