Car insurance is a common feature across almost every country around the world in which driving a vehicle is an option for the local population.
America is no different in this regard, and yet there are some quirks and considerations of how car insurance works here which are worth learning about whether you’re a resident or a visitor to the US.
Different states have different car insurance requirements
First and foremost, there’s no getting around the fact that each of the 50 states that make up the union is in control of how car insurance rules and regulations are created and enforced within its borders.
For example, while most states have a legal obligation for every driver to have some kind of insurance, both New Hampshire and Virginia give motorists the option to steer clear of it altogether. You’ll still have to register yourself as uninsured, and thus commit to paying costs if you are liable for an accident, of course.
Because of all this potential variability and complexity, it’s a good idea to use a car insurance comparison site to find the best deals that are available in the specific state where you’re based.
Credit score can impact insurance premiums
It’s odd to think that your credit history has any bearing on your driving abilities, but in the majority of states you’ll pay more or less for car insurance depending on your credit score.
Again, there are some exceptions to this rule; car owners in California don’t need to worry about a bad credit score costing them more when they renew their car insurance. But on the whole, this is an annoyance which most drivers face, so taking action to improve your credit score is sensible.
A valuable vehicle isn’t necessarily going to suffer from higher insurance costs
Another caveat about how insurance premiums are calculated in the US is that providers are more interested in statistics on the number of claims that are made, rather than only focused on how much a vehicle is worth on paper.
This means that you can expect to pay less for cover for a brand new family car, than you would for an older and less expensive sports sedan.
Insurers infer the demographic you fall into from the car you choose to drive, and if fewer people make claims in your category, then your premium price will be cheaper, even if the vehicle itself is relatively expensive.
Cars, not drivers, are covered by insurance
If you’re not from the US but you’ve seen plenty of American TV shows and movies, you’ll probably have noticed at some point that the characters often borrow vehicles from one another without worrying about insurance.
This is because for the most part, car insurance policies are attached to a vehicle rather than to the owner and driver. The result is that so long as a car has got a current policy in place, it doesn’t matter who is behind the wheel, because if an accident occurs then a claim can still be made.
It can be cheaper to keep car insurance even if you don’t need it
Lastly, having car cover even if you don’t intend to use your vehicle for an extended period is better than ditching a policy and then restarting it in the future.
Obviously this depends on your circumstances, but for drivers in the US there can be steep premium increases if you go through periods of not having car insurance. So regardless of whether you are driving on a daily basis, it’s still worth paying for insurance.