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Here are 5 facts about car insurance you should know

Added March 25, 2020
Lady sitting in the driver seat of a grey car

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.

Related Links

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Have questions about your car insurance bill? Check out these common questions about car insurance rates.

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