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 16, 2020

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Here's what you need to know...

  • Before you can register a vehicle, you are required to have liability insurance
  • Liability car insurance coverage is broken into three categories
  • Collision insurance covers the cost of damage to your car from an accident

Purchasing a used vehicle or maintaining the one you currently own is a good way to save some money, especially during the economic downturn. However, you do not want to spend the money you save on car insurance.

Every state requires motorists to obtain some form of car insurance to drive legally on roadways and highways.

When shopping for used car insurance, you should consider your state’s requirements, the type of vehicle you own or want to purchase and your financial situation.

Insurance companies offer competitive rates, but these state car insurance rates are typically dependent on several factors. These may include the type of car you drive, where you live, safety ratings of the car and the history of the used vehicle.

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Table of Contents

General Standards for Used Car Insurance

The minimum car insurance requirements for liability insurance in your state is the first consideration when selecting used car insurance.

Before you can register a vehicle, you are required to have liability insurance, which covers damages that you might cause to another person’s vehicle in an accident.

You want a policy with a solid company that understands state laws and guarantees coverage.

Liability car insurance coverage is broken into three categories:

  • Bodily injury per person
  • Bodily injury per accident
  • Property damage

Typically, deductibles will have an impact on your monthly and annual premiums. A higher deductible translates into a smaller premium.

However, if you are involved in an accident, you will have to pay the deductible before the insurance kicks in.

Aside from these considerations, other factors for a used car insurance policy may include:

  • Number of previous owners
  • Vehicle maintenance history
  • Past mechanical problems, including recalls
  • Previous accidents involving the car

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Is minimum coverage enough?

All states require drivers to have car insurance, whether the car is new or used. Each state sets minimum coverage amounts, which is called the financial responsibility limit.

Purchasing used car insurance based on the minimum will keep you compliant with state laws. However, the minimum might not be enough if you are involved in a serious accident.

While you want to comply with state law, you also want to minimize your financial exposure.

The state minimum requirements can serve as a guide to selecting a policy with sufficient coverage. Ultimately, you will want a policy that is suitable to your needs, income level and provides a sense of protection.

Typically, finance companies require you to have collision and comprehensive coverage for the duration of the car loan.

Collision insurance covers the cost of damage to your car from an accident.

Comprehensive insurance covers damages not caused by an accident, such as natural disasters, theft, and broken windshields.

The value of your used car is a determining factor in purchasing collision and comprehensive coverage.

Comparing Used Car Insurance

The best way to find a good premium is to compare car insurance. The costs associated with an insurance policy will vary based on many factors including the policy, coverage amount and your driving record.

It is best to prioritize your insurance needs and how much you can afford. Things such as your driving habits, where you live and your daily commute are essential factors.

Insurance companies will evaluate these factors, so it is good that you understand the process when comparing insurance quotes.

Comparing used car insurance will help you find the lowest car insurance rates.

Excessive speeding, living in a largely populated city and long commutes to and from work could place you in a higher risk category for most insurance companies.

Your driving behavior could determine whether you only need basic coverage or a more comprehensive policy.

For good drivers, some insurance companies offer accident forgiveness, realizing that accidents can happen with even the best drivers.

Another important factor is the environment in which you drive. Insurance companies want to know if you park your vehicle on a street or a garage.

Working or living in a high crime area, or in an area prone to car accidents will put you in a higher risk category.

However, consider insurance companies that include discounts for an alarm system or other anti-theft devices to help lower your premium costs.

Inquire about promotions, incentives, and discounts that can help you save money on the policy, yet still, l have adequate coverage.

any insurance companies will offer a discount if you carry several different types of policies such as homeowners or renters and life insurance.

Discounts could make a high cost policy more affordable.

Comparing used car insurance also includes looking at the viability of the insurance company. If you have to file a claim, you want to know that the company is still in business.

Some companies can offer low-cost auto insurance, but you could pay the ultimate price if it goes out of business.

In addition to discounts, policy offering and the company’s viability, you also want to review its customer service history. How many unresolved complaints does the insurance company have?

You can check with the local Better Business Bureau or the insurance commissioner’s office in your state.

After gathering all the pertinent details, you can make an informed decision about the used car insurance you will need. You can realize savings while driving legally and safely on the road.

Save the most money possible now! Enter your zip code bottom and compare car insurance for FREE!

References:

  1. https://www.safeauto.com/car-insurance/liability-insurance
  2. https://www.libertymutual.com/auto/car-insurance-coverage/property-damage-coverage
  3. https://www.iii.org/article/background-on-compulsory-auto-uninsured-motorists
  4. https://www.thebalance.com/do-i-need-comprehensive-coverage-527432
  5. https://www.statefarm.com/claims
  6. https://www.bbb.org/