Auto insurance protects you from paying the full cost for vehicle repairs and medical expenses due to a collision. Some factors that affect the premiums you pay for this protection, include your:
- Marital status
- Credit history
- Car's make and model
- City and neighborhood
Types of Auto Insurance
Every state requires drivers to have auto insurance. If you don't have insurance, you must have financial responsibility waivers. These waivers ensure that you can pay for property damages or medical expenses. There are several components that can make up your insurance policy:
- Liability coverage protects you if you are at fault for a collision. It pays for medical expenses and vehicle damage for the other driver and passengers.
- Uninsured motorist coverage pays for damages to your car and medical expenses if an uninsured driver hits your car.
- Collision coverage pays to repair your vehicle, if you were at fault for the damage.
- Underinsured motorist coverage pays damages for your car if someone hits it, but their insurance can't pay for your car damages.
- Comprehensive coverage pays for damage to your car due to theft, fire, or falling objects.
Auto insurance requirements vary from state to state. Most states require drivers to have liability coverage. You may choose to opt out of certain types of coverage, depending on your budget and car’s age. Check with your state insurance regulator to learn more about its requirements.
Be sure to read the declarations page of your auto insurance policy. This page is a summary of your policy. It includes:
- the length of coverage
- annual premium
- the largest amount your insurance company will pay out for each type of claim, and
- how your insurance company splits your premium payment between each part of your coverage.
Homeowners and Renters Insurance
Homeowners insurance protects your home and personal property against damage or loss. It insures you in case someone gets hurt while on your property. You may already have insurance on your home if you have a mortgage on the property.
Renters insurance offers renters coverage similar to homeowners insurance.
What Can Homeowners or Renters Insurance Cover?
Homeowners or renters insurance may pay claims for:
- Damage to your home, garage, and other outbuildings
- Loss of furniture and other personal property due to damage or theft, both at home and away
- Extra living expenses if you live in temporary housing until your house is being repaired
Homeowners or renters insurance may also pay for:
- Physical injury and property damage that you cause to others through negligence
- Accidents happening in and around your home, as well as away from home, for which you are responsible
- Injuries occurring in and around your home to anyone other than you or your family
- Limited coverage for money, gold, jewelry, and stamp and coin collections
- Personal property in storage
Start your search for a policy with general shopping for insurance tips. Keep these points in mind when shopping for homeowners insurance:
- Insure your house, not the land under it. If you don't subtract the value of the land, you will pay more than you should.
- Purchase enough coverage to replace what is insured. "Replacement Cost Coverage" gives you the money to rebuild your home and replace its contents. An "Actual Cash Value" policy pays the value of the property, at the time of loss. It usually pays less than "Replacement Cost Coverage" policy would, because of depreciation for age and wear.
- Ask about special coverage you might need. You may have to pay extra for computers, cameras, jewelry, art, antiques, etc.
- Flood and earthquake damage are not covered by a standard homeowners policy. Earthquake policy premiums depend on the likelihood of earthquakes in your area. Consider getting flood insurance, especially if you live in a flood prone area.
- Remember that landlords rarely insure your personal belongings. You will need to buy a renters policy, separately.
Contact your state insurance regulator for more information about homeowners and renters insurance.
Homeowners and renters insurance do not typically cover flood damage. The National Flood Insurance Program (NFIP) helps reduce the impact of flooding for renters, property owners, and businesses. Even if you live in an area that is not at high risk of flooding, you may still be required to have flood insurance.
How to Apply for Flood Insurance
- Find out if your community participates in the program. You can only purchase a flood insurance policy if you’re a renter, homeowner, or business owner, and your property is located in an NFIP participating community.
- Contact an insurance agent in your area. You can only buy flood insurance through an insurance agent; you cannot buy it directly from the federal government. If your local insurance agent is unfamiliar with the NFIP, you can find an agent serving your area by calling the NFIP Help Center at 1-800-427-4661.
What Flood Insurance Covers and Other Things You Should Know
- There are two types of flood insurance coverage: building property and personal property (contents). Flood insurance only covers physical damage to your building or personal property directly caused by a flood. The NFIP advises that you buy both types of coverage.
- Rates are set nationally and do not differ from company to company or agent to agent. These rates depend on many factors, such as the date and type of construction of your home and your building's level of risk.
- Typically, there's a 30-day waiting period from the date of purchase before your policy goes into effect.
- All National Flood Insurance policies include a congressionally-mandated surcharge. If your community participates in the Community Rating System, you may qualify for an insurance premium discount.
- Contact your flood insurance agent to make changes to, pay for, or renew your policy. If your mortgage lender requires you to have flood insurance, ask them questions about renewing or changing your policy.
- Learn how to prepare for and recover from disasters and emergencies.
File a Complaint
If you have a problem with an insurance company or agent regarding flood insurance, contact the company first. If you cannot find a solution, contact your state insurance regulator.
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Last Updated: April 11, 2019