If you are planning to drive a car while you are living in
the USA, you will need to have car insurance. If you are simply renting a car
from an established car rental company, you can get insurance coverage as part
of your rental contract. But if you are planning to buy a car in the USA, you
will need to have your own insurance coverage for driving on American roads.
Let’s go through the basics of why you need car insurance, what the various
elements of a car insurance policy are, and how to get car insurance coverage.
Why do you need car insurance?
There are several good reasons why you need to have car
insurance in the USA:
- It is required by law
- It proves that you are financially responsible
in case of an accident
- It covers most or all of the costs from
accident-related vehicle damage, property damage, and injuries to you and
others who may be involved
Most car insurance policies will charge you an annual
premium for coverage, which is usually broken down into affordable monthly
What are the various elements of a car insurance
Within the average car insurance policy are several
different types of insurance coverage. Some of them are required, and some are
optional – check your state’s regulations as to exactly what you will need:
types of car insurance coverage
will cover you in cases where an accident is determined to be your fault. It
takes care of the other party’s medical expenses related to bodily injuries, as
well as property damage caused by your accident. If you are sued as a result of
the accident, your liability coverage will pay for your legal costs, as well as
any financial settlement or judgment that the court hands down. If you have a
large amount of assets to protect, you should get higher levels of this type of
This takes care of your medical costs following an accident, no matter who
caused the accident. Some, but not all, states require this. It is also a good
idea to have this coverage if you do not have any other health insurance.
Underinsured Motorist: Even though it is illegal to drive without car
insurance, some people still do it. This coverage will pay for your accident
repairs and medical costs if the other driver in not insured and is at fault.
types of car insurance coverage
pays for repairs to your car if you are in an accident, whether it is your
fault or not. While collision coverage is not legally mandated, your auto
lender will likely require you to have it. This is to protect the lender’s
investment, during the term of your loan payments. While collision coverage is
a very good idea for newer, higher-value vehicles, you may consider dropping it
if your car is old and does not have much value left in it.
This covers you for damage that is not accident-related, like extreme weather
(hail and high winds), falling objects, flooding, fire, vandalism, and theft.
Nerdwallet has a good comprehensive overview of insurance requirements by state. Check it out to confirm that what you need before you being shopping.
How do you get car insurance?
Today, you have many choices when it’s time to get your car
companies: You have probably seen their ads online, on TV, over the radio,
and everywhere else. These are companies like Geico, eSurance, and Progressive.
You can simply go to each company’s website and get a price on a policy.
company agents: Every local community has lots of people who represent a
specific insurance company, and sell that company’s products, including car
insurance. You can find them using a search engine, and then call them for
pricing on a car insurance policy.
agents: These are people who represent several different insurance
companies, and can write you an auto insurance policy from the one that gives
you the best deal. You can search them out online, then contact them by phone.
The ideal way to get the best car insurance value is to shop
around and compare prices from as many sources as you can.
What documents do you need to get car insurance?
The requirements for getting car insurance, if you are from
another country, will vary from state to state. Check your state’s Department
of Motor Vehicles website for the specific requirements in your local area.
These will spell out whether your home country’s driver’s license is enough, or
whether you need to get an International Driving Permit or a state driver’s
license. You will also need to have the registration documents for your
vehicle, a local mailing address and phone number, and an email address.
Some insurance companies may require you to get a state
driver’s license. They will also want to check your driving record in your home
country. If this is not possible, your rates may be higher due to their not
knowing your driving history.
Find your state’s DMV here: https://dmvnv.com/50_state_dmv_list.html
What about the new pay-per-mile car insurance?
You may have heard about a new, less-expensive type of car insurance. It charges you by the mile, using an electronic gadget that plugs into your car’s diagnostic port. It also monitors your driving behavior, every time you drive. Some people who do not drive their cars much have found this system to be of value, but others have reported that the initially low rates have been quickly raised over a short period of time for no good reason, and that the claim service is extremely poor. Be sure to read reviews of any service you’re considering buying. The seemingly low rates may not be worth it
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