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Car insurance for your Smart car

Car insurance for your Smart car works just like car insurance for your regular car. You purchase a policy, pay your premiums, and you get coverage.

Car insurance is protection from the financial risk that your car gets vandalized, destroyed, or stolen, or that you cause an accident and are liable for damages. Almost every state requires you to have some kind of car insurance, although the type of car insurance and the amount of coverage you need to get for each type differs from state to state.

Car insurance for your Smart car works just like car insurance for your regular car. You purchase a policy, pay your monthly (or annual) premiums, and, if you get into an accident, your car insurance company pays to settle any claims of the victim or the bills of the repair shop. Without car insurance, an accident could end up costing you tens or even hundreds of thousands of dollars.

A Smart car is a highly compact personal vehicle very popular with city-dwellers because it’s so easy to park. It’s not meant to be a status symbol or taken on long road trips, although it does get relatively great mileage. It also won’t fit more than just the driver and a single passenger.

The size of the Smart car suggests that it would be easily totaled in a collision, thus making car insurance rates higher. But the available information about Smart car insurance suggests that premium rates are about the same as car insurance for a traditional car, and maybe even less expensive.

Read on to learn more about:

  • How does car insurance work?
  • Are Smart cars more expensive to insure than traditional cars?

How does car insurance work?

Smart car insurance is technically just car insurance for your Smart car. The difference is in the small details, like the premium rate and deductible, but between a Smart car and a sedan even those points may not differ all that much. In other ways, such as what’s covered and how the car insurance companies pay out, your car insurance for your traditional car should be almost identical to that for your Smart car.

Car insurance is comprised of different types of coverage, and you have the option of buying more of one type than others, depending on your specific needs and the laws governing mandatory insurance coverage in your state.

The most common components of car insurance coverage are:

  • Liability insurance — Covers payments to the victim when you cause him or her a bodily injury (BIL) or property damage with your car.
  • Personal injury protection (PIP) — Covers medical payments when you cause an injury to yourself or your passengers with your car.
  • Collision insurance — Pays for repairs to your car when it’s damaged in an accident.
  • Comprehensive insurance — overs financial loss for vandalism, theft (including the contents of the car and the car itself), and weather damage to car when you’re not driving it.
  • Uninsured/underinsured motorist insurance — Makes up the difference between the other party’s coverage (or lack thereof) and the actual amount of damages you suffered.
  • Gap insurance — Increases the payment made when your car is totaled or stolen to the amount the car was worth when you financed it, before depreciation

Before you get car insurance for your Smart car, take into account your coverage needs. Smart cars are relatively inexpensive, so you probably don’t need more than minimum coverage in the collision and comprehensive insurance areas.

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Takeaway

Car insurance premiums work similarly to those in life insurance, disability insurance, and health insurance: In general, the more risk you pose, the higher your premiums will be.

But you should consider getting a lot of coverage in the liability insurance and PIP components, because though your Smart car may be small, it’s still made of dense steel. You don’t want to be on the hook for the cost of somebody else’s monster truck if your little bullet on wheels shreds its suspension.

Are Smart cars more expensive to insure than traditional cars?

It’s easy to confuse a Smart car, which is a specific type of car brand, with a car that seems “intelligent,” like a traditional car with voice activation, a fancy touchscreen monitor inside, and an internal computing system to help it run. While not all lowercase-S smart cars are Smarts, many Smarts have these features as well.

A traditional “dumb” Smart car just happens to be very easy to park. For that reason, your rates will probably reflect the same concerns car insurance companies have about all drivers:

  • How much coverage you need;
  • The amount of deductible you’re willing to pay;
  • Your age, gender, and whether where you live has a lot of crime;
  • Your driving record, including how much mileage you put on the car and what kind of car it is;
  • Your credit history.

In some of those details, you may be able to save on rates when getting a quote for your Smart car. Namely, because Smart cars are often purchased by people who live in wealthier neighborhoods, car insurance companies may assume those people are low risk. Likewise, because Smart cars aren’t generally used to make long trips, you could save on the part of the auto insurance premium that factors in mileage.

The same discounts frequently apply to Smart cars as traditional cars, such as those for safe drivers or for adding safety features to the car. If your Smart car runs on electricity, you could potentially earn a discount for going green.

If your Smart car does have more complex internal components inside, such as a computer system to help control the vehicle, it could be a little costlier to insure than a car with a more traditional construction. But thanks to the design of the car, which usually feature a durable steel frame, you may be able to save money on components like collision insurance.

But Smart cars are a relatively new type of car. Auto insurance companies likely don’t have as much information, compared to more traditional cars, about how Smarts fare in crashes or how often they’re stolen. That makes it difficult to predict what your Smart car will cost to insure. The only way to find out how much your Smart car insurance premiums will be is to get a quote.

Policygenius’ editorial content is not written by an insurance agent. It’s intended for informational purposes and should not be considered legal or financial advice. Consult a professional to learn what financial products are right for you.

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