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Car Insurance for First Time Buyers

Have you recently been booted off your parents’ car insurance policy? Or maybe you just bought your first car! Either way, you’re going to need car insurance to keep your vehicle protected from the unexpected.

At American Family Insurance, we think it’s important you’re informed about your policy in order to feel confident about your coverages.

Instead of thinking of insurance as just the cards in your glove box, we’ve highlighted some must-know information to get you savvy about your first car insurance policy.

What’s on Your policy?

Your car insurance policy is the legal document that tells you all the specifics about your coverage. It includes:

  • How much coverage is provided
  • Who and what is covered
  • Limitations and exclusions of your coverages
  • Coverage begin and end date
  • How much you pay for coverage (known as your premium)
  • How to file a claim

Choosing Your Coverages

When purchasing car insurance, you’ll have to decide which coverages you want for your vehicle. Each type of car insurance coverage is designed to financially protect you for different situations — coverages span from protecting you, your passengers, other people, damage to others’ property (like their car) and damage to your vehicle. Your insurance agent can help you decide which coverages are best for you, so don’t hesitate to ask questions to ensure you understand how you’re protected. Take a look at common car insurance coverages to better understand your options.

It’s also a good idea to take the time to evaluate your insurance needs periodically. You may need more or less coverage depending on certain life changes. For instance:

  • Did you just get married?
  • Did you start a family?
  • Did you buy a house or a new car?
  • Did you retire?

Big life changes like these are great times to review your insurance policy to make sure your needs are being properly met.

Car Insurance Is Legally Required

Did you know that almost every single state legally requires you to carry car insurance? Though your state probably requires a minimum amount of liability insurance, keep in mind, the legal requirements they set are typically not enough to cover serious damages to a vehicle or more severe injuries. So you’ll want to research how much coverage you may want on top of the state requirements.

Wondering what coverage amounts to choose? Your agent will help you find coverage suited for your unique lifestyle, but in the meantime, here are some tips to get you started:

  • Make sure you at least have the minimum liability requirements for your state. According to dmv.org, if you’re caught driving without insurance, your driver’s license and/or vehicle registration could be suspended, you could receive a ticket, face increased insurance premiums in the future and have to pay some hefty fines.
  • Opt for comprehensive and collision insurance if you still owe money on your vehicle or if you wouldn’t be able to replace it without it being a huge financial burden. If you lease or have a loan on a car, you’ll typically be required to have comprehensive and collision insurance.
  • According to the Insurance Information Institute (III), it’s recommended to carry $100,000 per person of bodily injury liability coverage, and $300,000 per accident.

You’re also required to have proof of insurance in your vehicle at all times. If you were to get pulled over, you’d be asked to provide proof of insurance, and if you don’t have that information on hand, you could receive a ticket — on top of the ticket for which you were originally pulled over!

Many insurance companies have apps that you can download on your smartphone for quick access to your insurance cards. At American Family Insurance, we offer the My Account app, which lets you easily access your policy, insurance cards, make payments, review claims and manage your bills.

Paying for Car Insurance

When you purchase car insurance, you’ll make periodic payments known as your premium. A premium is the amount you pay for coverage under the contract in order to stay insured. Typically, you can choose to make monthly payments or opt to pay bi-annually. Many times, companies offer a discount for those who choose to pay in full (bi-annual), so be sure to ask your agent if you’re eligible.

If you don’t make your payment by the payment due date, your policy will lapse. This means that the benefits stated in your policy are no longer active. Thankfully, insurers usually offer a grace period in which you have additional time (typically 10-14 days) to pay your premium. Once the payment is made, your policy goes back into effect. And you’ll be covered once again. This is known as reinstatement.

Want to make sure you never miss a payment? You can sign up to automatically have your premium deducted on your due date.

Choosing a Deductible

Deductible is a common term you’ll hear as you learn about car insurance.

A deductible is the amount you’ll pay out of pocket for repairs before your insurance company steps in to cover the rest. You’ll choose a deductible amount when purchasing your car insurance and that’ll be the agreed upon amount you’ll pay in the event of an accident.

Do you always have to pay a deductible? Nope! In fact, you’ll typically only have to pay a deductible if you have comprehensive or collision insurance. Here’s some more info about deductibles, including some specific instances you might run into paying one.

Consider Roadside Assistance Coverage

When the unexpected happens, like a flat tire or a dead battery, our Emergency Roadside Assistance is ready to help. It’s an additional, inexpensive coverage on your policy that’ll get you back on the road.

If you need a tow or if you accidentally locked your keys in the car, we’re just a phone call away. Find out more about our 24/7 Emergency Roadside Assistance and learn how this coverage can give you peace of mind.

Save Money on Your Car Insurance

If you’re looking for ways to save on your car insurance, you might just qualify for a number of discounts! Many companies offer discounts for simple efforts, like paying your bill in full, bundling your policies or for having a good driving record.

Be sure to ask your agent about all the discounts you qualify for with American Family Insurance.

Getting a Quote

Ready to take the plunge and get your first car insurance policy? With American Family Insurance, we’re 100% focused on helping you protect what matters most. You’ll get:

  • A local insurance agent who knows you and how best to support you.
  • A claims specialist ready to step in and keep things running smoothly.
  • A convenient and easy-to-use online option for submitting your claim.
  • 24/7 phone support to keep your claim moving.

Get a personalized insurance quote conveniently online, or connect with your American Family Insurance agent — they’re ready to help customize your car coverages to fit your unique needs.


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Related Topics: Insurance Needs , Discounts , Insurance Terms