What Is Automobile Insurance?
Automobile insurance is a service provided by private companies, where the insurance provider agrees to compensate those who hold a policy for damage, loss or injury to yourself or others in exchange for a premium, or payment, that is paid on a regular basis — this arrangement is called an indemnity. The amount and type of coverage you get with an insurance policy depend on the type of coverage you get and many other factors. For a guide on what types of automobile insurance are available and how to minimize your premiums.
Why Do You Need Automobile Insurance?
Insurance is important because it protects the driver and others on the road from the potentially devastating financial effects an auto accident can have on the parties involved. If you get a loan to buy a car, the financial institution that underwrites your loan will require you to get a form of auto insurance called collision insurance in order to protect the value of the vehicle. Also, all 50 states and the District of Columbia require some sort of minimum coverage for liability insurance or, where insurance is not compulsory, drivers must prove that they can meet minimum liability requirements. In many states, when you purchase a vehicle you must prove your ability to meet a these minimum levels of financial obligation and, in most states, you need such proof just to get your driver's license.
How To Get Automobile Insurance:
- Get a Social Security Number.
Before you get insurance, you will need to own a car. And unless you have the cash to buy a car out right, you will need a car loan. When applying for such a loan, the lender will require a Social Security number. If for some reason you are unable to obtain a Social Security number in the USA, you may be allowed to provide a tax identification number instead.
- Get a Driver's License.
In order to get insurance, you will need some sort of driver's license. If you have been in the country for more than 30 days, you will need a driver's license issued from the state in which you have taken up residency. For details on getting a driver's license, see How2 Get a Driver's License.
If you have been in the USA for less than 30 days, you may use your international driver's license in some states, if you possess one.
- Get a Vehicle.
Automobile insurance insures the car first, then the driver. This means that if you lend your car to someone, your insurance will be responsible in the event of an accident. It also means the vast majority of automobile insurance plans require you to own a car. In some states, you must have liability insurance just to get your driver's license, so insurance companies have started offering non-owned insurance policies that insure a driver but not to a particular car.
- Get Insurance.
Once you have completed the above steps, you are ready to go to an insurance office and buy a policy for your vehicle. Before you actually travel to an insurance office, you should comparison shop to make sure you are getting a competitive rate.
The insurance agent will need you to have several things to set up your policy.
a. A state-issued driver's license or a valid international driver's license.
b. The title or bill of sale for your vehicle.
c. The vehicle identification number, or VIN, from your vehicle. This number should be on your bill of sale, but it is also at the base of the windshield of your vehicle on the driver's side.
When you apply for an automobile insurance policy, remember that the insurance company will check your driving record in this country and, in some cases, your native country to determine your premium.
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