what exactly is auto insurance?

Question

i just got my first driver's license and I am eagerly awaiting my new car. however, i hear that i have to "insure" my car and "register" it and have "registration papers." exactly what does this mean for me? will i not be able to get my car? what exactly is this insurance - is it a monthly bill, one-time payment?

Answer 1

Get the car insured first, because bad stuff can happen before you are even driving it.

Buying a car can be pretty expensive, which often involves paying some bank in installments over several years. The bank may impose some insurance requirements over and above what the state government requires.

If you buy from an auto dealer, they will offer financing plans, but if you shop around to several banks first, you can probably get far better financing deal than what is offered by the auto dealer.

To drive it on the public highways, you have to get a license plate, but you can't get a license plate unless you first show proof that you own it and that it is properly insured according to the laws of your state ... and I give links below with respect to you figuring that out.

So you buy the car, and get proof of ownership, and have to register that ownership with the state where you live, then get license plate to make it legal to drive it onto the highway. If you buy the car from an auto dealer, they can help you with this. If you buy it from some yahoo like an ad in the newspaper, make sure you get the proper paperwork from that person, or it will be the same as you taking possession of a stolen car.

I suggest for your first car, get it from a regular auto dealer so you know the rules, or go to the government motor vehicle bureauo first and find out what paperwork is needed.

At most auto dealers, there are temporary license tags, so you can drive the car right off the lot, then get the tags transfered, but you ought to first get with your auto insurance company and tell them what kind of car you are buying, so that you have the insurance arranged before you drive the car off the auto dealer lot.

Remember after Katrina, where people's homes ruined by combination of flooding & high wind ... insurance companies said tough luck ... your insurnace was in case of wind damage, but flooding did this stuff, and you did not have flood insurance ... well same kind of deal with auto insurance ... you want to make sure you have no holes in your coverage.

Here is some introductory info on types of auto insurance ... almost everyone will need more than one kind
* Collision Insurance is to cover the damage to your car in an accident, and can include things like pot-holes. Typically you get this with a deductable, where you pay the first $ 250 or so of damage, then insurance company picks up the rest ... how much deductable you get is a HUGE difference in the cost of the insurance ... I take care of cost of fixing if someone car door hits mine in a parking lot, and let insurance cover the big stuff
* Comprehensive is for other damage to your car where it was not an accident with another car ... like flood, earthquake, vandalism, some animal ... it also has decuctable like collision insurance
** If you have deductables, and you rent or lease a car, you may need insurance to make up the difference, which is called "gap" insurance ... also if your car not fully paid for, the bank loaning the money might not allow uou to have deductables
* Liability Insurance is to cover other people property and medical expenses if there is an accident in which it is your fault. This can include passengers in your car, pedestrians, people in other vehicles ... you need to make sure the $ total is enough to cover reasonable expectations, because if it is not enough, you have to make up the difference.
* Medical Insurance covers YOUR body if you are in an accident ... it not cover other people like your passengers, unless you specifically get that included in the policy
** This "Personal" insurance can include lost wages, and other inconveniences if you can't work while recovering from an accident
* Property Insurance covers YOUR stuff, your car if it is stolen, but not damage to your car in an accident (that is under collision insurance) ... if you moving your household to a new address, you might want extra coverage in case of losses in transit
* Uninsured Insurance ... suppose you live in a FAULT state (that's where the person at fault ... their insurance pays all the damage) ... but suppose the other person has no insurance, has no money ... if you have Uninsured Insurance, then that takes care of your needs ... otherwise your insurance company says it was not your fault, you have to collect your money from the person who does not have any, tough luck ... you need to figure out if you live in a NO FAULT state, where the person in trouble pays their own way through their insurance company ... most states are FAULT states which means that in any accident dispute, the lawyers get most of the money.
*... ask which of if this is to cover other people driving your car with your permission ... frequently with a family car, it does not cover teenagers unless extra $ paid
http://www.iii.org/individuals/auto/a/whatis/

Each state has different rules on auto insurance ... go to this map & click on the state you are interested in
http://www.ampminsure.org/auto/states.php

This includes the state where your residence is, and any adjacent states you may drive in a lot, to see if the insurance in your home state is not really good enough for when you plan to travel

Here is the information in a comparative chart, so you can see what the minimum requirements are for your state, then compare to how they are different in others
http://www.iii.org/media/hottopics/insurance/compulsory/

For example, in some states if you have an accident, you are not required to have to show proof of insurance, you don't have to have it in your car, or on your person ... other states the other way around ... so if you leave a state that requires insurance but not proof, then you get into trouble in a state that requires proof, but you left that at home, you could be in big trouble, so you need to know about the differences in laws from state to state.

I have to pay my auto insurance every six months, and it costs a few hundred dollars. For you being a first time driver, it may cost a thousand dollars or more a year.

Here are a bunch of companies that provide that kind of insurance ... you ought to get some comparison quotes
http://search.yahoo.com/search;_ylt=A0geu67BG6BGpnYAMBVXNyoA?p=auto+insurance+&y=Search&fr=sfp

Some other useful links
http://www.iii.org/individuals/auto/

Answer 2

You don't just spend the money to buy a car and be done with it. Not only do you have to be able to afford the car but also the insurance, property taxes, etc. Insurance is what you pay an insurance company to own your car. (its required by law that you have insurance). If you get in an accident they will pay for part (most like very little) of the damage to your car. But lets say you completely total your car and a 1.5 million dollar lamborghini or something. How you gonna pay for that lambo? Thats where the insurance comes into play, the insurance comapany covers it for you because you can't afford to. If you didn't have insurance and you did that, you'd be screwed.

Also more expensive and sporty the car is, the more expensive insurance and bills are.

Answer 3

Buying, owning, and operating a car includes a lot of responsibilities. Being able to steer your car, parallel park, and knowing to stop at stop signs is only a very small part of it.

You need to understand defensive driving, state laws regarding insurance, licensing, registration, title laws, property taxes, emission inspections, and safety. Understand traffic laws and what it means to get tickets for violation of those laws. Understand the seriousness of drinking and driving to your future. Understand that you and your family can be sued for everything they have for a small mistake that you might make in causing an accident that hurts or kills someone.

You should also know about maintenance of your car, checking fluids, checking tires, buying the right gas, getting regular oil changes, and knowing how to change a flat tire.

You should also learn about automobile financing, credit scores, interest rates, and car dealer tricks. Learn what it means to be late or miss loan payments. Learn about leasing so that you don't let dealer salespeople talk you into it when you shouldn't do it.

Learn how to choose the best cars based on price, reliability, insurance cost, mileage, mechanical condition, and CarFax history reports.

Answer 4

I suggest one to try this web site where onel can compare quotes from different companies: http://HELP-INSURE.NET/index.html?src=2YAhumfgTB63

RE :What exactly is auto insurance?
i just got my first driver's license and I am eagerly awaiting my new car. however, i hear that i have to "insure" my car and "register" it and have "registration papers." exactly what does this mean for me? will i not be able to get my car? what exactly is this insurance - is it a monthly bill, one-time payment?
1 following 12 answers

Answer 5

You have to have insurance on the car. There are state requirements for it. Things like medical liability, and uninsured motorist, and for their security, you have to have comprehensive insurance, that will pay to have your car repaired if you have an accident. That protects them from you not paying for the car if it is totaled.

To register the car, that means getting license plates.

As for paying for the insurance, it can be paid in a variety of ways, from weekly to yearly and several other options in between. good luck.

Answer 6

Get and compare quotes from different companies at - INSURERATESME.INFO-

RE What exactly is auto insurance?

i just got my first driver's license and I am eagerly awaiting my new car. however, i hear that i have to "insure" my car and "register" it and have "registration papers." exactly what does this mean for me? will i not be able to get my car? what exactly is this insurance - is it a monthly bill, one-time payment?

Answer 7

Get insurance quotes

Answer 8

Axel
I found the best options here. Good luck!
http://all-car-insurance.blogspot.com/

Answer 9

something you need in order to not get arrested.

Answer 10

Please tell me you don't live anywhere near me....