Talking about insurance makes most people cringe, but the more you know the better off you are. Here we lay out how it works, the terminology, and why to get car insurance.

How it Works
First, get a car. Obviously. Auto insurance isn’t much use without a car. So…why include it? Mostly to point out that the type of car you get affects your insurance rates, so that car you sold your children, a kidney, and stranger off the street to get also will come with a hefty insurance price.

Determine what you could pay yourself. You agree to pay a certain amount upfront if you get in an accident (the deductible). The insurance company takes that amount out of the money they give you if you make an accident claim. You are just saying that if an accident happens, you’ll pay this much of the bill.

Pay your insurance company a certain, pre-determined amount (the premiums) to insure your car. This amount is determined by a number of factors, revolving around different components of your life. This amount ensures that if an emergency happened, your insurance will be there to ease your financial pain.

Drive with peace of mind. Paying car insurance can protect you from the many perils involved with driving (and by most states’ law, you have to have it). So sit back, relax, and cruise the roads…but don’t get too relaxed.  You’re driving, doncha know.