If you are a new immigrant in USA and just got your driving license, you might be thinking about buying a new car and driving around the city just like everyone else. If you are in the big city like New York, you may not need a car to commute because of easy availability of public transportation. But if you live in suburban area or smaller city and towns, you will find it necessary to have a car to survive. In order to legally drive in USA, you must have to have .
When it comes to getting an , usually new immigrants turn to their friends (who came here before them) for advice. Then their friends take them to their agent. Due to the language barrier and complicated insurance policies, many new immigrants seem to say 'yes' to a lot of key questions asked. So they pretty much agree on everything as long as the payment sounds close to their friends' insurance quote. Once deal is done they leave agent's office with all smiles, happy and ready to hit the road.
But when the accident actually happens, that's when he / she finds out that his insurance company will not cover his damaged car and will not pay hospital bill because he had insurance of liability only.
Yes, this is pretty common problem among the new immigrants in USA. There are thousands of instances like this where peoples' American dream are ruined, all because of misunderstanding of insurance policy. In order to prevent this from returning again to you, your family and friends, you must understand few basic ideas on along with understanding difference between liability and full coverage.
Understand the Liability vs. Full Coverage
If you have liability only insurance, it means that, it the event of an accident (by your fault); your insurance covers the damage you cause to other people and their property. It will not cover the damage happened to you and your car. Each state has a law that tells the minimum amount of liability you need to have. Usually liability only insurance is cheaper.
Full coverage on the other hand covers the liability coverage as well as your personal property. Full coverage is also known as collision and comprehensive because it covers both. If you have an accident with another vehicle or another object eg wall, pillar, animal etc then the damage will be covered by the insurance. And if your car gets damaged by the weather or vandalized, that will also be covered by the insurance.
Other general ideas you need to know
Age: If you are under 25, your insurance will be high because you fall into high risk age group. If you are over 25 the insurance is significantly lower.
Driving history: If you are new with no driving history in USA, you can still be eligible for insurance but the amount will be higher. Once you are assured for certain period of time, your good and bad driving history will be determining factor for lower or higher insurance quote.
Car Model: If you have a brand new car of latest model your insurance premium will be higher. But if you have used economy car, the premium will be lower. A lot of new immigrants find it wise to buy used car with fairly good condition.
Credit ratings: Credit ratings also affect your promotions. If you have good ratings it helps to lower the amount.