what is auto insurance?

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Auto insurance protects everything you  and your family have worked so hard for, and will work so hard for in the future against financial loss from an accident. It is a contract between you and the insurance company. You agree to pay the premium and the insurance company agrees to pay your losses as defined in your policy.


Auto insurance provides property, liability and medical coverage:

  • Property coverage pays for damage to or theft of your car.  You hit something, vandalism or even swerve to avoid a deer and end up in a ditch.  This pays for those situations.
  • Liability coverage pays for your legal responsibility to others for bodily injury or property damage.  When you hit someone or something and damage their property or injure someone, this coverage comes in to play.  Probably the most important coverage to make sure you buy enough to protect your current financial being and your future finances.  Think about it: if you have only $100k of coverage, but you end up owing $300k, you would have to pay the difference of $200k!  And the extra coverage is a lot less than you think.  Sometimes it actually costs less than the lower coverage amounts!
  • Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.  This coverage can help pay for you and your passengers when they do not have health insurance or if they do, to pay deductibles and co-pays.   

An auto insurance policy is comprised of six different kinds of coverage. Most states require you to buy some, but not all, of these coverages. If you’re financing a car, your lender may also have requirements.

Most auto policies are for six months or a year. Your insurance company should notify you by mail when it’s time to renew the policy and to pay your premium.

why do you need auto insurance?

It’s really all about protecting everything you’ve worked so hard for and will work hard for in the future.

Accident Protection

If you’re in an accident or your car is stolen, it costs money, often a lot of money, to fix or replace it.

Injury Protection

If you or any passengers are injured in an accident, medical costs can be extremely expensive.

Liability Protection

If you or your car is responsible for damage or injury to others, you may be sued for much more than you’re worth.  Remember the example above.

Financial Protection

Not only is having insurance a prudent financial decision, many states require you to have at least some coverage.

As a local, multi location Independent Agency, McGhee Insurance Agency is an advocate for finding auto insurance that meets your specific needs.

Things to consider and questions to ask your agent

Here are few things to discuss with your agent that will influence your decisions

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How much can you afford to pay if you get in an accident? (To keep premiums low you may want to have a higher deductible and be willing to pay more for repairs.)

What is the insurance company’s level of service and ability to pay claims?  What is their “rating?”

What discounts are available? (Ask about good driver, multiple policies and student discounts and the “telematics” programs)

What’s the procedure for filing and settling a claim? (Ask who to call and what happens after you file a claim.)

If I bundle my home insurance with my auto, will it save me money?