Which auto insurance to choose in the United States
Everyone agrees a car is an essential object in the United States … and consequently, automobile insurance is an essential subject! But for most of us, auto insurance is also a real headache because the field is complex, the rules differ according to the States and the quality of the coverage varies greatly from one insurer to another. But how exactly does car insurance work in the United States?
You should know that you cannot drive an international license for more than a few months (the time varies from one state to another). You must therefore retake your license in the state in which you reside or, if there is an equivalence with your license, as in Florida, you must then pass an “administrative visit” (which goes very quickly) in an organization specialized (DMV), under penalty of being in violation and even considered by the American police as “without a license”!
You should also know that an automobile garage in the USA will never let you leave with your newly purchased car if you do not provide proof that you are the holder of the license and that you are well insured. And, on the insurer side precisely, if you present a foreign license to a company, it will refuse you any contract.
Moreover, as an expatriate and an individual who has just landed on American soil, you are considered by insurers as a young driver! Even if you have 10 or 15 years of driving behind you, with thousands of kilometers on the clock and no accidents in your country of origin, the American state considers that you have no history and therefore that you are a beginner. . And unfortunately the status of young driver does not facilitate obtaining good insurance at an attractive price …
Auto insurance in the United States, how does it work?
Unlike other insurance (eg home), auto insurance is compulsory in most states in the United States. However, the laws and requirements differ from state to state. In other words, the minimum coverage required for auto insurance is not necessarily the same in California, Nebraska, or Florida. It is therefore important to get information from an insurer who knows the specifics of the state in which you reside. It should tell you the minimum insurance you need for your car, which can serve as a basis for thinking about choosing the coverage that best suits your needs and your budget.
There are several types of auto insurance with different levels of guarantees. However, for minimum coverage, US insurers generally offer four types of insurance.
– Liability for bodily injury caused to third parties (Bodily injury liability – BIL): this insurance covers damage caused to persons, other than the insured driver or his passengers, and compensates them in the event of serious injuries or permanent injuries during an accident for which the insured is responsible. It also covers the costs if the accident was caused by a driver other than the insured, but covered by the latter’s policy. It can also pay attorney fees in the event of legal proceedings.
– Liability for material damage caused to third parties ( Property damage liability – PDL): the insurance covers damage caused by the insured in the context of a car accident on the property of another person, such as example a house, a fence, a garage door or a bicycle, in the event that the insured is declared liable.
– Personal injury protection (PIP): this insurance reimburses the insured, members of his family, or occupants of the accident vehicle for medical costs (ambulance, doctors, hospitalization, radios, drugs, rehabilitation, prostheses, psychiatry, etc.), funeral expenses, lost wages or even childcare costs. All these costs are covered by whoever is responsible for the accident. It also covers the insured if he is involved in an accident as a passenger in someone else’s car. Please note, for this guarantee to work, you must go to the doctor within 14 days of the accident, otherwise, the guarantees are reduced. This is the coverage most often required in states whose insurance system is based on “strict liability”.
– Liability for damage caused by an uninsured driver ( Uninsured / Underinsured motorist – UM): this policy covers injuries and damage caused by an uninsured, insufficiently insured, or hit-and-run driver. It compensates for medical costs, pain, and suffering, as well as lost wages for the insured and his passengers.
But there are other optional guarantees, in particular “Collision” and “Comprehensive” insurance, which are also often imposed on the beneficiaries of a car loan.
– Bodily injury caused to the driver or his passengers (Medical payments or MedPay – MP) : the insured is covered for bodily injury caused to himself or to his passengers, regardless of the person responsible for the accident. MedPay pays “deemed necessary and reasonable” medical costs and funeral costs. The insured is also covered if he is injured as a passenger of another car, in public transport, by another driver as a pedestrian, or while cycling. Please note, “MedPay” is not a substitute for health insurance because it only covers in the event of an accident.
Note: “Personal injury protection” and “Medical payments” insurances both cover injuries sustained by policyholders and their passengers in the event of an accident. But PIP covers a wider range of costs. MedPay is generally used to supplement standard liability coverage.
– Damage without collision (Comprehensive other than collision – OTC): damage caused to the insured’s vehicle other than by a collision (explosion, fire, vandalism, theft, broken windows, hail, etc.) are covered by this insurance. This warranty also includes damage caused by the fall of an object or by the impact on an animal.
– Towing & Labor Coverage: also called (Emergency Road Service), it covers the costs of emergency services on the road, for example towing when the car is in an accident. It also pays the labor costs, when it comes to changing a flat tire or even unlocking a locked car where it is immobilized. The conditions and the amounts of support for towing or repairs vary according to the contract.
– Car rental (Rental reimbursement) : the insurance covers the rental costs of a replacement vehicle if the car is being repaired following an accident or if it has been stolen.
– Loan repayment (Gap insurance): if an accident occurs while a car loan is in progress, the insurance can help the driver by acting as a “bridge” between the amount owed on the loan and the fair market value of the car.