You may be surprised to learn that your auto insurance policy isn’t all the same coverage. There are actually two different types of insurance standard and non-standard auto insurance, and understanding how each of them differs can help you decide which one will provide the best protection for your needs. Both standard and non-standard coverage are offered by private insurers in many states, so what type of coverage will be available to you will depend on where you live. When do you need standard vs. non-standard coverage?
Standard and Non-Standard
What is standard auto insurance?
Standard auto insurance covers repairs to your car, injuries to you, passengers in your car, your legal liability for accidents you cause, fire damage from a crash, vandalism and theft of personal items left in your car. In addition to coverage limits and deductibles (which are set by state law), factors that affect auto insurance rates include: driving record; where you live; marital status; age; credit history; make of vehicle; length of time with current insurer.
Generally speaking: The more risk factors insurers see in your profile, such as a young driver or poor credit history or older age on a multi-vehicle policy, then generally higher prices apply.
What is non-standard auto insurance?
Auto insurance companies classify insurance coverage into two categories: standard coverage, also called comprehensive or full coverage, and non-standard or limited coverage. While standard auto insurance is essential for every driver, having non-standard policies may be beneficial depending on your lifestyle, occupation, hobbies and other factors.
For example, you may want a non-standard policy if you work in an industry that requires you to transport large sums of money on a regular basis (such as a delivery person) or if you frequently lend your car to others for extended periods of time (such as a parent who allows their teenager to drive). When it comes to planning financially for your future, it never hurts to ask questions – let us help.
The Risks of Going Without
So, if non-standard insurance isn’t necessary for most drivers, why would you consider it? Some insurers make it difficult to purchase a policy from them. For example, some companies don’t sell non-standard insurance online or through agents. Some states have no providers of non-standard auto insurance (though they usually do have a standard carrier offering policies). Or you may be paying too much for your current coverage.
If your premiums seem too high, check with other companies to see if they offer more reasonable rates. And regardless of whether you need standard or non-standard coverage, shop around—you might be surprised by how much cheaper a policy is elsewhere.
Considerations for Drivers in Different States
Every state has different driving laws and penalties for violations, which means drivers who are shopping for auto insurance need to understand what coverage is required by their states. If you live in a state with strict auto insurance requirements, you might want to consider getting non-standard coverage, which will typically be more affordable than standard coverage (particularly if you are a young driver).
Conversely, some states don’t have any specific coverage requirements at all—which means standard insurance could be more affordable than it would be in another state. Overall, a major factor that determines whether your coverage is standard or non-standard is how much your insurer can charge you to renew it every year.
Tips for buying non-standard coverage
Most people don’t know they need non-standard coverage until they have a car accident. Whether it’s body shop repairs, rental car costs or getting your vehicle towed after an accident, it can get expensive quickly. When you buy standard coverage from an insurance provider, you are typically only covered for as much as your policy limits will pay for damage to your own vehicle—which usually isn’t that much.
Check with your insurer for an exact amount. If you want more protection, consider buying additional coverage through a specialty auto insurance company. These companies offer non-standard policies that cover more than just damage to your own vehicle. However, these policies come at a higher price than standard ones because of their added benefits. For example, if you live in an area where road salt is used during winter months and rust is common on vehicles, there may be extra options available to protect against rust damage when compared with a typical auto insurance policy.