Here are 5 facts about car insurance you should know

Searching for a new car insurance policy can be stressful, especially when you don’t have all the information you need. So, let’s take a look at five car insurance facts you should know about when you’re researching new plan options.

1. There are many factors that affect your auto insurance rate

There are various factors insurance companies use when determining how much you should pay for car insurance. Here are a few:

Age: Young drivers typically pay more for vehicle insurance than experienced drivers. Younger drivers have less experience behind the wheel, so they are at a higher risk to be involved in incidents. Car insurance premiums may gradually drop between ages 25–30 and can be almost half of the original cost by age 30. But your insurance doesn’t automatically drop at age 25. And when you reach your 60s, car insurance rates may begin to rise again.
Driving record: This is one of the biggest factors in determining how much you’ll pay for car insurance. If you have a history of being involved in accidents, getting speeding tickets, or committing other traffic violations, your insurance may be more expensive.
Location: Where you live can also affect your car insurance cost. If you live in an area with frequent insurance claims, this could affect the cost of your insurance. If you live in a zip code with a higher vehicle theft or crime rate, your insurance premiums may cost more than someone who lives in a more rural area.
Your car: The make, model, and year of your car can also affect how much it costs to insure. The technology used in today’s vehicles means it costs more to repair.

There are many more factors that can affect your rate, so make sure to talk with an agent to see what else you should know.

2. There are auto insurance discounts available to help you save

It’s important to be able to find a car insurance policy you can afford. So, there are often a variety of car insurance discounts offered, including:

Multi-car discount
Advanced quote discount
Transfer discount
Payment frequency discount
Homeowners insurance discount
Defensive driving discount
Anti-theft discount

To learn more about these discounts, contact your local agent or visit Dairyland®.

3. Car insurance can cover towing and rental car costs

If you’re in a car accident or your car breaks down, insurance can provide collision coverage beyond simple damage to your car. Towing and labor coverage can cover you if your car needs to be towed to a service center or if you need roadside assistance to fill an empty gas tank or fix a flat tire.

If your car isn’t drivable, rental car insurance coverage can help you reserve a rental and help pay for the use of a rental car, up to the limits of your coverage.

4. In most cases, car insurance follows the car, not the driver

Standard auto insurance policies follow your car wherever it goes, no matter who’s driving. If you lend your car to your roommate to go to the grocery store and they get rear-ended in the parking lot, your insurance—not your roommate’s—would provide coverage.

Some states don’t require you to have a standard auto insurance policy. So, you may opt for a named driver policy instead, where the car insurance follows the driver. With a named driver policy, the insurance coverage only extends to people who live in the same household and are listed on the policy. If you have this type of liability coverage and your roommate gets rear-ended at the grocery store and isn’t listed on your policy, that will be an out-of-pocket cost for them.

5. Car insurance is required in 49 of 50 U.S. states

In every state except New Hampshire, If you own a car, you’ll be required to get car insurance before you can register your vehicle. While you may be required to have car insurance, each state is different, so make sure to check and see what you need to have to meet your state’s minimum requirements.

When should you add insurance to a new car?

As you shop for a new car, getting insurance should be a part of your plan from the beginning. Here are some things to keep in mind:

If you don’t have an existing policy, you should speak with an insurance agent before you buy your new vehicle. That way, you’ll be able to get an idea what it’ll cost to cover the vehicle you’re considering, so you can get an insurance policy in place before you drive the vehicle off the lot.
If you do have an existing policy, let your insurance agent know ahead of time that you’re shopping for a new car and find out what you need to do to make sure you’re covered when you buy the vehicle.
Once you’ve made a decision on what to buy or lease, notify your insurance agent as soon as possible so you’ll be covered. Be prepared to provide the year, make and model, vehicle identification number (VIN), and lien information. They’ll be able to update your policy right away.

Most insurance companies provide a grace period for you to notify them about adding a vehicle to an existing policy, but understand the coverage provided may not adequately cover you and your new vehicle.

What’s the minimum coverage available?

Generally, the minimum coverage mandated by law will only cover the damages to the other vehicles and occupants in an accident you caused, but won’t cover damages to you or your own vehicle. Understand the minimum required coverage can often be inadequate to pay for damages you might cause.

If you choose to pay for only the minimum mandated coverage, you’re taking on a much greater risk. You need to decide if the value of your vehicle is worth the extra premium it’ll cost you to completely protect it. Consider buying higher limits of coverage to give yourself greater peace of mind.

What’s the difference between liability coverage and full coverage?

The terms “liability only” and “full coverage” can mean different things to different people.

Depending on the state you’re in, you’ll normally be required to at least cover the damage or injury you cause others. That’s liability insurance.

Full coverage will pay for not only the damage you’ve caused to others, but the damage to your own vehicle, as well as medical expenses for yourself and others in your car.

What other auto insurance coverage options are available?

There are add-ons to car insurance policies that cover things like the cost of renting a car when yours is damaged, towing, emergency roadside assistance, and custom equipment installed on your car.

If you’d like to explore those options, it’s a good idea to talk with an insurance agent who can explain everything available, how it helps protect you, and how much it costs. Your new car is an investment. You want to make sure you’re adequately covered when an accident happens. We can help you understand what’s available so you can make an informed decision.

Should I add other drivers to my insurance policy?

Insurance companies require you to list everyone of legal driving age—including teenagers—in the household, and anyone else who might drive your vehicle on a regular basis. So, when you buy a new car and add insurance, give some thought to others who might be driving it. To include them on your policy, you’ll need their full name, date of birth, and driver’s license number.

What factors impact insurance costs?

Where you live, how many miles you drive, what you use your car for, and where you drive—especially if it’s a heavy traffic area—can all affect your rates. So can your driving record. Your insurance agent will ask you questions to discover the type of insurance that makes sense for you.

Do you have to speak with an agent, or can you buy insurance online?

At Dairyland, we provide options that let you choose. You can go through our website, call us directly, or find an independent agent near you to talk with. It’s generally a good idea to speak with someone who can help answer your questions and make sure you have the right coverage. Our team will work with you to make sure you have the coverage you need for your unique situation.

Are there ways to save on your insurance premiums?

One of the benefits of working with Dairyland is the number of payment options we offer. Popular options include monthly payments, quarterly payments, or paying the full amount right away. By paying more up front or making larger scheduled payments, you can improve your price. You’ll see the lowest overall cost when you pay your term premium in full.

You may also qualify for discounts for things like owning a home or having prior insurance. Most of all, it pays to have a good driving record. The cleaner your record, the more likely you'll get a better rate.

Prepare before buying a car

Plan for insurance coverage before you get behind the wheel. Don’t assume you can just take care of things after you’ve bought a vehicle. Be open and honest with your insurer so they can work with you to make sure you have the coverage you need, when you need it. That way, you can drive your new car with the peace of mind of knowing you’re protected if something goes wrong.