Caleb Meriwether, Haven Insurance Partners, visits with Dan Reaves, host of ‘The Dan Reaves Show,’ today, and each Wednesday at 3:30 p.m., to discuss all things insurance.

Understanding Auto Insurance: A Guide for New Purchasers

Purchasing auto insurance for the first time can feel overwhelming, but understanding the basics helps ensure you’re properly protected while driving—and that you’re not overpaying. This guide walks you through the essentials: coverage types, how rates are determined, the meaning of premiums and deductibles, and how the claims process works.

1. Coverage Types

Auto insurance policies typically include several core types of coverage:

• Liability Coverage: This is required in most states. It pays for injuries and property damage you cause to others in an accident. It does not cover your own vehicle or injuries.
• Collision Coverage: Pays for damage to your car from an accident, regardless of fault.
• Comprehensive Coverage: Covers non-collision-related events, like theft, vandalism, fire, or weather damage.
• Uninsured/Underinsured Motorist Coverage: Protects you if you’re hit by someone with little or no insurance.
• Medical Payments or Personal Injury Protection (PIP): Helps pay for medical expenses for you and your passengers after an accident, regardless of who is at fault.

2. Premiums and Deductibles

• Premiums are the amount you pay to the insurance company—monthly, semi-annually, or annually—to maintain your coverage. This amount is based on several factors (discussed below).
• Deductibles are what you pay out of pocket before your insurance kicks in for a covered claim. For example, if your deductible is $500 and you file a $2,000 claim, you’ll pay the first $500, and the insurer covers the remaining $1,500. Higher deductibles typically result in lower premiums, but you’ll pay more in the event of a claim.

3. What Affects Your Rate

Insurance companies use many factors to calculate your premium, including:

• Driving record: A clean history with no accidents or violations leads to lower rates.
• Age and gender: Younger drivers, especially teens, typically pay more due to higher accident risk.
• Vehicle type: Expensive cars or those with high repair costs usually cost more to insure.
• Location: Areas with high traffic, theft, or weather risks often have higher premiums.
• Credit score: In many states, insurers consider credit history as a factor in pricing.
• Coverage limits and deductibles: Higher coverage limits mean more protection but higher cost.

4. Filing a Claim

If you’re involved in an accident or suffer damage, follow these steps:

1. Ensure safety first. Move your vehicle to a safe spot and check for injuries.
2. Call the police if required, and document everything with photos and notes.
3. Exchange information with the other driver(s).
4. Contact your insurance company as soon as possible to file a claim.
5. A claims adjuster may inspect the damage, determine fault, and estimate the repair cost.

Most policies allow you to choose where to repair your vehicle, but your insurer may have preferred shops. Once your deductible is paid, the insurer covers the rest (up to policy limits).

5. Tips for First-Time Buyers

• Compare quotes from multiple insurers—rates can vary significantly.
• Bundle policies (like home and auto) for possible discounts.
• Ask about discounts for safe driving, low mileage, anti-theft devices, or good student status.
• Understand what’s covered—and what’s not. Ask questions before buying.