Jessica Sautter is a Content Writer for CarInsuranceCompanies.com with a Bachelor’s Degree from Eastern Michigan University in Elementary Education with a Major in Reading and a Minor in Mathematics.

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Chris Harrigan has an economic degree from Limestone College and an MBA from Clemson University. He previously managed auto insurance claims for Enterprise Rent-A-Car. Currently, he is using his business and insurance expertise to provide insurance data analysis and visualizations to enhance the user experience.

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Reviewed by Chris Harrigan
Former Auto Insurance Claims Manager

UPDATED: Oct 15, 2020

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Key takeaways...

  • There are many ways to buy car insurance including online or in person
  • Collision coverage protects you in case you are involved in an accident
  • Insurance agents must also stay on top of new laws and regulations regarding insurance

These days, there are many ways to buy car insurance. You can buy it online, over the phone, or through a traditional agent.

While some agents can sell any insurance policy, including life or homeowner’s, some agents have developed a niche in the car insurance market.

Insuring used cars is a bit different than insuring new cars. An agent who has vast experience with used cars can help his clients save a lot of money while making sure they have the full amount of coverage they need.

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Table of Contents

What Insurance Agents Do

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Insurance agents are basically salespeople who help match up a client’s needs with a policy sold by an insurance company.

Some agents work for one particular company, selling all of the types of insurance that company offers. Other agents are independent, selling policies from multiple companies.

Insurance agents must also stay on top of new laws and regulations regarding insurance, as well as new products the companies offer.

Agents analyze their client’s financial situation and need so that they can ascertain what will be the best policy for their particular needs.

The agent also assists the clients when there is a need to file a claim. For more information about the job of an insurance agent, please see this U.S. Department of Labor’s page.

There are different types of insurance agents and brokers. The American Association of Managing General Agents explains the difference between the different types of agents and their roles in the industry.

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Used Car Insurance Agents

In reality, most insurance agents cannot afford to specialize in car insurance policies for used cars. However, some insurance agents deal with car insurance more than others.

Some agents find themselves dealing primarily with insuring new cars.

There are some differences between policies for used cars and new cars, though they are minor. Almost all companies will cover both new and used cars.

The parts of the auto insurance policy are the same. The only difference sometimes occurs in the comprehensive and collision parts of the policy.

Comprehensive and Collision Coverage

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One thing a good insurance agent can do is to help his clients determine if it’s in their best interest to carry comp and collision on their insurance. But what is comprehensive and collision?

But what is comprehensive and collision?

Your liability will pay for the other car’s repairs, while collision takes care of yours. If your vehicle is totaled, collision pays you the market value of the wrecked car minus your deductible.

You can use that money to buy a replacement vehicle.

Comprehensive also pays for the repair or provides you with the money to replace your vehicle if it’s damaged in something other than a traffic accident.

If your car is stolen, this is the part of the policy that covers it. It also pays for damages caused by storms, like hail dings and dents or trees that fall over onto the car.

If your car is parked in the garage and is damaged by a house fire, comp covers that as well.

While these two parts of the auto insurance are separate, they are almost always sold together. They both have a deductible as well.

A deductible is an amount you have to pay the repair shop before the insurance company will pay the rest of the repair bill.

When to Carry Comprehensive and Collision

Unless you buy a vehicle with cash outright, you will have to carry comp and collision on your car insurance policy.

Though no state requires it, all lenders require that anyone with a car loan must have these two coverages on their policy.

This protects the lender’s investment in case you wreck the vehicle and then refuse to pay your car payments. They can still repossess it and have it repaired to sell.

Without comp and collision, you would be totally responsible for paying for a new car or for repairs if you are in an accident that is your fault.

That’s why experts like those at Consumer Reports use a guideline often times the amount of the premium to determine when you might be able to drop comprehensive.

If the premium you pay just for the comp and collision parts of your policy multiplied by ten exceeds the value of your car, then you might be able to do away with comp and collision.

Another option, in this case, is to raise your deductible on that car to the highest you can afford. This will save you money on the premium of your older

This will save you money on the premium of your older car but will insulate you from the full cost of a replacement.

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Know the Law in Your State

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Knowing the minimum requirements for car insurance in your state is an absolute must for any car insurance agent.

As laws vary from state to state, it’s important that you find someone who knows exactly what you need to drive legally and to protect your finances.

This is one reason insurance agents must be licensed in the state in which they work.

Every state requires that you be financially responsible for your actions when you are behind the wheel.

While one or two states allow residents to purchase a surety bond to show financial responsibility, the vast majority require that you carry a minimum amount of liability insurance on yourself and your car.

Liability is that part of the auto insurance policy that pays for the damage you cause to other drivers and vehicles if you’re responsible for an accident.

The bodily injury liability pays the driver’s medical bills.

The property damage liability pays for the other car’s needed repairs or provides the driver money with which to replace a totaled vehicle.

However, in some states, the required amounts for this insurance are rather low. For example, in California, you only have to have 15/30/5 insurance to drive legally.

The first two numbers refer to the amount of bodily injury liability you have–$15,000 per person and $30,000 per accident.

The third number is the property-liability amount.

Even though it is one of the most expensive states in which to live, California only requires you to have $5,000 of property insurance.

A good insurance agent will go over things like this, helping you to see if you really need more than the minimum to protect you from being sued.

In fact, the Insurance Information Institute recommends that most people carry 100/300/50 insurance.

Other Requirements

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In no-fault states, car insurance can be particularly confusing. This is because the car damages are usually paid by whoever caused the accident, but the medical expenses are paid by each driver’s own car insurance.

Some states do allow drivers to sue the at-fault driver if the medical expenses are higher than a certain amount.

Even in states with standard insurance rules, there are often other parts of a car insurance policy that are required by law.

For instance, some states require that all drivers carry uninsured motorist protection to pay for repairs caused by drivers who don’t have any insurance.

Others require drivers to carry some sort of medical coverage, either medical payments or personal injury protection (also known as PIP). An insurance agent can help you decide which one to carry.

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References:

  1. http://www.bls.gov/ooh/Sales/Insurance-sales-agents.htm
  2. http://www.aamga.org/education/ens2
  3. https://www.statefarm.com/insurance/auto/coverage-options/comprehensive-coverage
  4. https://www.farmers.com/auto/coverage/
  5. http://www.21st.com/auto-insurance-information/understanding-car-insurance-deductibles.htm
  6. https://www.nationwide.com/difference-between-comprehensive-and-collision.jsp
  7. https://www.consumerreports.org/cro/car-insurance/buying-guide
  8. https://www.geico.com/information/aboutinsurance/auto/shopping-for-car-insurance/
  9. https://www.progressivecommercial.com/coverages/liability/
  10. https://www.allstate.com/tools-and-resources/car-insurance/property-damage-liability-insurance.aspx
  11. http://www.iii.org/articles/can-i-drive-legally-without-insurance.html
  12. https://www.statefarm.com/insurance/auto/coverage-options/medical-payments-coverage