Have you ever considered what happens to your assets in the event of an accident? Are you fully aware of your rights and responsibilities as a driver, passenger, or pedestrian? Insurance can be difficult to understand, but understanding it is important. In this article, we will walk you through some of the basics so that when the time comes, you’ll be prepared.

Why do I need insurance?

It may seem obvious, but knowing exactly what you’re insuring yourself against is essential. While everyone probably wants to have their house replaced if there’s a fire or keep driving a car if they crash, some people might not actually know that they’re putting themselves at risk by lacking these types of coverage. While deductibles will vary depending on your specific policy, typically anything that’s not covered by your home or car insurer (e.g., injuries sustained when riding a motorcycle) could fall under other. If you want protection against life’s unexpected accidents, look into getting comprehensive coverage for things like medical bills, damage caused to others’ property and more.

How does the claims process work?

Once you make a claim, your insurer will usually get back to you within 24 hours. If they don’t, check up on them! Once they know of your claim, they’ll process it as quickly as possible—but that doesn’t mean there won’t be delays. Your personal details may take some time to verify; another person could potentially have similar details; or sometimes the whole claims process simply takes time. But remember, if any of these steps takes longer than anticipated then give your insurer a call to keep things moving.

What kind of coverage should I buy?

That depends on a number of factors, such as your age, your income level, and whether or not you own a home. Auto insurance will cover any medical expenses resulting from an accident that is your fault—but what if someone hits you? You’ll have to file a claim with their car insurer. If another driver hits a parked car or causes property damage, their personal liability coverage should step in. Check out our guide to auto insurance types to see which policies are right for you. And make sure to take stock of your credit report before applying—insurance companies may look at that information when determining whether to offer coverage at all (and they may raise rates if they find mistakes).

What happens after I file a claim?

If you’ve just been involved in an accident, your head may be spinning from thoughts of doctors bills, police reports, and car repairs. And then there’s that whole other side of things: dealing with your insurance company. In fact, as much as we hate to admit it, one of our biggest fears is getting into a car accident because we know dealing with an insurance company can be confusing and time-consuming. The good news is that once you have a basic understanding of what happens when a claim is filed—which we’ll outline below—it’s actually fairly easy to do. Read on for important details on what goes down when you file an auto claim after an accident (hint: most of your questions will likely have some pretty common answers).

What if my policy lapses?

In most cases, your car will not physically stop working if your insurance lapses. However, your driving privileges could easily be taken away by law enforcement or government officials. In addition, if you have an accident or cause damage to someone else’s property while driving without car insurance coverage, your rates will likely increase dramatically after reinstatement—in some cases by as much as 150 percent (not to mention potential legal fees and penalties). Having an auto policy is also required for new drivers to get a driver’s license in many states. Moreover, even if your insurance company doesn’t penalize you for non-payment of premiums when they are due (as long as it isn’t done intentionally), you’ll likely have more difficulty getting any claims paid should something happen during a period of lapse.

How can I save money on my premium?

If you’re looking to save money on your premium, there are a few different things you can do. First, make sure to read up on what optional coverage is available. Some of these things, like additional liability protection or roadside assistance may seem frivolous—and if so, opt out of them—but others could potentially end up saving you big bucks should an accident occur. You may also want to consider increasing your deductible (it’s likely your cheapest option). For example, bumping from $250 to $500 will lower monthly premiums by 10%. But it’s important that if something does happen and your premiums go up (because of deductibles), that they don’t skyrocket.