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Vehicle insurance

What is vehicle insurance?

Vehicle insurance is a type of insurance protection, which is designed to protect the property interests of the insured, related to the costs of restoring the vehicle after an accident, breakdown or purchase of a new car after theft, compensation for damage caused to third parties while operating the car.

Nowadays, vehicle insurance is regulated by the laws of each state individually. Differences in the laws of the other states are mainly limited to the types of insurance that are mandatory there, as well as the minimum amount of coverage. So, as mentioned earlier, each state is responsible for shaping its own vehicle insurance requirements.

However, in this regard, all states can be divided into 2 categories:

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  • Regardless of who is at fault, the damage you suffer is covered by your insurance (which is called «no fault»). This type of insurance is common in 12 states – Florida, New York, Michigan, and others.
  • The person at fault is responsible for the accident (called “at fault”). There are 38 states, including California and Washington.

How do I get insurance for a vehicle such as a car?

You can buy car insurance in person or online from an insurance company, insurance agent, or broker (the latter must have a license). This vehicle insurance is issued for 6 or 12 months. It can be paid monthly or as a lump sum, for which you will often receive a discount. If you insure for one year, the price is guaranteed not to go up; if you insure for six months, the price may go up every six months.

Often insurance companies offer very favorable terms for new customers. However, good insurance companies also have discounts that are offered to regular clients in case of long-term cooperation.

What do I need to get insurance?

You will be asked to provide the following documents and data when applying for vehicle insurance:

  • A U.S. driver’s license (if you don’t have one, whatever license you have). If you don’t have a local driver’s license, it doesn’t mean you can’t be insured. Most likely, the insurance will be a little more expensive than if you have a local license. Just remember to let your insurance broker know you have one;
  • VIN (Vehicle Identification Number);
  • Model and year of manufacture of your vehicle;
  • The zip code of the place where your vehicle will be staying overnight. Each insurance company has its own rating of safe areas. Accordingly, the more incidents occur where you live, the more expensive your insurance will cost you.

There’s also one more item that must be specified in the insurance policy – the estimated number of miles you plan to drive per year. This information is provided in the form of a free letter. Some insurance companies ask you to submit paperwork every year that reflects the real situation. And if it turns out that you greatly underestimate the data, you may be required to compensate for the last 3 years. In general, it’s worth bearing in mind that any fraudulent vehicle insurance is a federal crime and is punishable accordingly.

Why I need a vehicle insurance?

Although accident and disaster insurance are not required by the laws of all states, insurance is a very smart and profitable investment. The only people who do not benefit from having such insurance are those who own older vehicles whose repairs would cost more than their residual value. If, on the other hand, the car is new and its happy owner gets depressed about every scratch, it is definitely worth thinking about insurance. Moreover, there are different types of insurance, so you can choose your own insurance based on your desires and preferences.

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