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Auto Insurance Basics

Car Insurance Basics

Auto insurance can be confusing and overwhelming.  To help you understand it and make it a bit simpler, we have made a guide to auto insurance basics!


What is car insurance?

Auto insurance is an agreement between and your insurance company. You pay the insurance company a certain amount (a premium) for a specified term (usually six months) and if you get into an accident or something happens that is covered under your insurance policy, the insurance company will help cover the costs associated with the damage.  Insurance policies often have limits, which is the maximum amount your car insurance will pay if you make a claim.


Why do I need it?

Driving a car can be dangerous.  Car insurance helps protect you financially if you happen to get into an accident or something happens to you, your passengers, your car, and even other people, property, or cars you may damage.  Most state requirements mandate that if you own a car, you need to insure it!


How does it work?

Basically, if some sort of accident involving your car occurs, you won’t have to pay out of pocket for all the expenses that come along with it.  Depending on your coverage, you may need to pay a deductible or pay out of pocket if the damages are greater than your policy limits.  This just means that you are subject to a portion of the expenses out of your own pocket, which you agree to when purchasing a policy.  The insurance company will cover the rest of the charges, up to your policy’s limits.


What does it cover?

Well, that depends on what and how much coverage you choose.   Most states require a certain minimum amount of coverage, but beyond that, you choose how much coverage you need.


Wait can you go into more detail?

Sure.  Here are some different types of insurance coverages:

Collision – Regardless of whose fault it was, it will help cover costs of repairing or replacing your car.
Comprehensive – This type of coverage helps protect you when things other than automobile accidents damage your car.  For example, if a tree branch falls on your car or someone decides to vandalize your car, then comprehensive coverage can help cover some costs of repairs.
Personal Injury Protection – If you get into an accident and have personal injuries, personal injury protection helps pay for medical expenses for the people who are on the policy, regardless of whose fault it was.
Medical Payments – This is similar to personal injury protection.  The difference is that medical payments will help cover some of the medical expenses for you and your passengers that result from an accident.  There’s usually a limit to how much of the expenses will be covered.
Uninsured/Underinsured Motorist Coverage – If you get into an accident with someone who doesn’t have insurance or doesn’t have enough coverage, you are able to collect damages that you personally experience.
Liability – In an accident that is primarily your fault, liability insurance will cover bodily injuries and property damage claims up to your policy limits.

Those are some of the main ones.  Of course there are more types of coverage, but talking to an agent will be the best way to figure out what you need and how much coverage you should get.


How can I save on auto insurance?

Insurance companies offer many different discounts that you can qualify for.  In general, being a safe driver with a safe car will save you money! Here’s a list of some common discounts:

  • Low Mileage Discount
  • Safe Driver Discount
  • Good Student Discount
  • Multi-Car Discount
  • Anti-Theft Device Discount
  • Paid-In Full Discount
  • Student Away at School Discount


Any specific car insurance traits for CT?

Connecticut requires its car owners to have liability coverage and uninsured/underinsured motorist coverage.  Here are the minimums for CT coverage.

Liability coverage minimum is:

  • $20,000 for bodily injury per person per accident
  • $40,000 for bodily injury total per accident
  • $10,000 for property damage per accident

Uninsured/underinsured motorist coverage minimum is:

  • $20,000 per person per accident
  • $40,000 total per accident

These are just how much coverage you are required to have in the state.  If this is confusing, it’s okay!  An insurance agent will know these requirements.  Interestingly enough, CT does not require you to purchase collision or comprehensive coverage.  However, your bank or lender may require it, and you may want to consider the coverage to protect your assets and savings.


What about MA?

The State of Massachusetts requires car owners to have four types of insurance coverage:

  1. Bodily Injury to Others – $20,000 per person and $40,000 per accident
  2. Personal Injury Protection – $8,000 per person in accident
  3. Bodily Insurance Caused by an Uninsured Auto – $20,000 per person and $40,000 per accident
  4. Damage to Someone Else’s Property – $5,000 per accident

The Personal Injury Protection (PIP) will cover you and your passengers regardless of whose fault it was.  But, in Massachusetts, you can still be considered at fault for the accident.  Similar to CT, you are not required to purchase collision or comprehensive coverage, but your bank or finance company may require you to have it.  Talking to an agent will make it clear what type of coverage you need and other options you can consider.

Call an Encharter agent at 888.754.8299!




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