Question about car insurance

[Azndude51]

I'm about to by my first car, so I need to get insurance but I'm not sure how it works.

Here's my understanding of it: So if I get into an accident and it's the other person's fault, the his insurance will pay for all of my damages. If it is my fault, I pay my deductible and the insurance pays the rest of the my damage and all their damage. And if it's my fault, my rates will go through the roof.

I know each policy/company is different, but I'm asking in general, is my understanding correct?

 

[DonaldC]

If you live in a no-fault state your insurance pays to repair your car regardless of who is at fault and then seeks restitution from the other party/insurance company if you are not at fault - at least that's the way it used to be.

 

[Blackjack200]

There are 2 different types of auto insurance, ideally both will only pay when the damage is "your fault" (I don't know how "no fault" works)

liability: this is the type that's mandated by law and covers you for damage you do to other people's cars or property (or them if they get hurt/killed)

Collision: this covers you for damage to your own car, and is not mandated by law (though if you lease or have a car loan, the bank will require you to carry it)

It's pretty certain that your rates will go up if you are at least partially responsible for an accident; I'm less sure about what the case is when the other party is 100% at fault.

 

[Regs]

Originally posted by: DonaldC
If you live in a no-fault state your insurance pays to repair your car regardless of who is at fault and then seeks restitution from the other party/insurance company if you are not at fault - at least that's the way it used to be.

Yeah, I think thats if you have full coverage. Which you'll have to get if you take out a loan.

 

[jagec]

Originally posted by: Blackjack200
There are 2 different types of auto insurance, ideally both will only pay when the damage is "your fault" (I don't know how "no fault" works)

liability: this is the type that's mandated by law and covers you for damage you do to other people's cars or property (or them if they get hurt/killed)

Collision: this covers you for damage to your own car, and is not mandated by law (though if you lease or have a car loan, the bank will require you to carry it)

It's pretty certain that your rates will go up if you are at least partially responsible for an accident; I'm less sure about what the case is when the other party is 100% at fault.

And comprehensive, which is fairly cheap, and pays for your car if it gets stolen, the windshield gets cracked, or someone steals your radio. Don't forget this one! It's the first thing you should buy after liability.

And uninsured/underinsured, which pays if the OTHER guy is at fault, but can't cover his or her obligations.

And towing, and rental, and a number of other things.

Don't bother getting the last two, or collision, unless you're over 25, have a lot of money, and/or drive a nice car.

 

[SlicedBread27]

Also, I'm pretty sure you're insurance rates will go up in most states if you get in an accident, even if you aren't at fault. Strange but AFAIK its true.

 

[Gibson486]

Originally posted by: SlicedBread27
Also, I'm pretty sure you're insurance rates will go up in most states if you get in an accident, even if you aren't at fault. Strange but AFAIK its true.

It goes up because it increases the amount of accidents that have occured in your area. More accident prone areas have higher rates.

 

[Azndude51]

What about accident free discounts? For example my parents have accident free discount with Sate Farm, if they get in an accident but it's NOT their fault, would they still get it?

 

[DaedalCipher]

That totally depends on the insurance company.

Here's my own advice to you: when getting liability/comprehensive (the other guy was right, don't waste time on collision), go with the 100/300/100 option. I've done a lot of car insurance shopping over the years, and while you pay more for this coverage, which means 100 thousand dollars/300 thousand dollars/100 thousand dollars, it is necessary. You don't want to get in an accident and run out of insurance money to pay medical, just to save the 10 bucks a month for the cheapo option. Also- jack up your property liability insurance all the way if you can. Default is usually 25 grand, and max (for me at least) is 50 grand. The cost per months is about two dollars of difference, and if you crash accidentally into a gas station or something not having enough insurance is killer.

Don't laugh, I saw it happen once to a mail man. Ouch.

good luck