Insurance can be a tricky topic to navigate; understanding what you need and when can be even trickier. What types of insurance are essential and in what situations would you use them?
Health and car insurance top the list, and while these two protect very different assets, they do share some similar traits. Below, we take an in-depth look at car and health insurance and what to expect from each of them.
Important Facts To Know About Insurance in the US
- As of 2019, it’s no longer compulsory for US citizens to carry active health insurance. In 49 of the 50 states, however, it’s still mandatory for car owners to hold active auto insurance at all times.
- Car and health insurance may be secured through one or two different insurance brokers.
- Using the same broker for both car and health insurance usually means paying for a bundle deal. In most cases, this leads to lower premiums. This means that securing all your insurance through one broker is likely cheaper than paying for it from two different institutions.
- When seeking coverage, the best plan is the one that offers complete protection, a reasonable rate, and the least amount of obstacles.
Differences Between Car and Health Insurance
The main difference between the two types of insurance is the value of what they protect. Health insurance protects your well-being (and that of your family), while the other protects against your car’s loss of value.
Due to the difference in value, each asset must be treated with varying levels of urgency. You’re more likely to push yourself to the doctor when you’re not feeling well than you are to take your car to a mechanic due to a scratch.
It’s also more likely that you’ll use your health insurance more frequently than your car coverage.
Generally, health coverage offers a broader range of protection than car insurance.
- Preventative Care
Since routine check-ups and selective tests are covered, you’re in a better position to take preventative care of your well-being than that of your vehicle.
Similarities Between Car and Health Insurance
The main reason for securing coverage (whether it’s for your health or car) is to ensure you’re protected in the event of an emergency.
- Licensed and Regulated Practices
Whether dealing with your health or car, brokers only validate claims by licensed and regulated businesses. You wouldn’t visit a doctor without the necessary qualifications. The same goes for your vehicle. Glass.Net notes that it’s always best to have licensed technicians tend to your car.
Both types of insurance will require regular monthly payments, whether or not you make use of it during that time.
- Policy Language
If you’re familiar with either type of insurance, the language used and applied to the different plans is the same.
When to Use Which Insurance
It may seem simple, but these two plans can occasionally get mixed up. For example, what insurance would you use if you were hurt in a car accident?
This is dependent on the type of plan you have, as there are car insurance packages that cover your medical expenses in the event of an accident. If your care plan doesn’t have health or injury coverage, your bills will automatically fall back to your health coverage.
When scouting for brokers, it’s important to know what type of coverage you and your family need. This will point you in the right direction and provide you with a clearer indication of what types of plans you should take.
Is Health Coverage Necessary for Car Owners?
The simple answer to this is “no.” Since health insurance is no longer compulsory, it’s not mandated for car ownership. Car insurance, on the other hand, is still a requirement for owning and driving a car.
That being said, it’s worth noting that when filing an insurance claim for personal injury with car insurance, the set limits may not be enough to cover all your expenses.
Taking the above into consideration, it’s best to have both auto and health coverage at all times. Any expenses covered by auto insurance are only applicable when you’re in an auto-related accident. Health coverage, however, will protect you in the event of sickness, disability, or injury.
When you have both plans and are hurt in an accident, your car coverage will kick in first—until the extent of your coverage is reached. Once this happens, your bills default to your health plan.
Factors When Calculating Monthly Installments
Insurance brokers consider several factors when calculating your plan’s monthly premium. This will also depend on the type of plan and coverage you’re taking.
One of these factors is your credit score. This gives the broker an indication of your paying habits.
Another critical aspect to consider is your driving and claims history. Having many prior claims (especially expensive ones) is a red flag to brokers and may result in a higher-than-normal premium.
If you’re the owner and driver of a vehicle, it’s essential to have comprehensive insurance. Having both health and car insurance provides peace of mind that you’re covered should an injury arise from a car accident.
Understand what your needs are and consult a broker or insurance representative to help you make the right choices for you and your family.