Frequently Asked Questions (FAQ)
What is auto insurance?
Auto insurance is vital to protect you from financial loss in case you are ever in an accident that is your fault. Auto insurance is effectively a contract between you and your insurance company and as long as you pay your premium, they will pay any losses as defined by your policy.
What does a basic auto insurance policy cover?
There are up to six types of coverage from which to choose: bodily injury liability, property damage liability, personal injury protection, uninsured/underinsured motorist, collision, and comprehensive coverage. Each component is priced separately and your state will require you to purchase some but not all of them.
Can I drive without insurance?
You should never drive without insurance. Every state requires drivers to meet their minimum liability coverage requirements or have proof of financial responsibility.
What insurance company should I choose?
You should choose an insurance company that provides excellent customer service at a reasonable price. They should have a proven track record of financial stability and be licensed to insure vehicles in your state. Finally, an insurance company should inspire confidence that you are protected in the event of an accident no matter who is at fault.
Do I need insurance if I lease a car?
You must insure a vehicle even if you are leasing it. In fact most dealerships and financial institutions will require comprehensive and collision coverage in addition to your state's minimum liability requirements. They may require GAP coverage as well.
What's the difference between a cancellation and a nonrenewal?
A cancellation is when your insurance company terminates your policy for non-payment, fraud, or if your driver's license is suspended or revoked. A nonrenewal is when the driver or insurance company chooses not to renew the policy when it expires.
What kind of information does my auto insurance company or agent need?
You will need to provide things such as address, vehicle specifics (year, make, and model), Social Security number, and other very basic information. You should also be able relate your insurance history and any information about other drivers on the policy. Be prepared to possibly give them permission to review your driving record and credit history.
How much coverage is needed?
Nearly every state requires minimum amount of liability insurance coverage. You can usually guarantee you will need more than the minimum amount because accidents typically cost far more. If you are found legally responsible for more than your insurance covers, you could end up paying for the difference out of your pocket, which could easily wipe out your finances. Make sure you speak with your insurance agent or company representative about retaining higher liability limits or consider an umbrella or excess liability policy, which will pay for costs when your basic coverage is exhausted.
What if I can't find coverage?
If you cannot find coverage due for some reason, you can utilize two options: use your state assigned risk pool or find a high-risk policy from an insurance company that covers high-risk drivers.
AUTO INSURANCE CLAIMS
How do I file claims?
If you have been in an accident and your car needs repair, you will need to make a claim. You should contact your insurance company and the other driver's. If you want to expedite the process you will likely need to send them a copy of the police report if one was filed. You will need to have your vehicle appraised and an estimate will be provided, once you agree to an amount, the insurance company will cut you a check. If you are making a claim with your own insurance company, your claim amount will be minus your deductible, if you have one.
What are my options if I have problems settling a claim?
You should contact your insurance company immediately and voice your protest. Make sure you do your research and check your policy for any arbitration service your insurance company may offer. You may need to employ the help of your state insurance department or have an independent arbitrator hear your case. If you still do not find satisfaction, you may need to hire an attorney as a last resort.
Do I have to use certain auto parts for repairs?
You do not have to use a certain brand of auto parts for your repairs, however your insurance company or state may stipulate that original equipment manufacturer (OEM) parts be used or that generic parts be used whenever possible to hold down costs. Some companies may allow you to choose between generic and OEM parts.
How are my cars value and the cost to repair it determined?
You can determine the cost of your vehicle by consulting the National Association of Automobile Dealers or the Kelley Blue Book. You insurance company will use an adjustor and give you an estimate of how much they think it will cost to repair. It is up to you to have an auto repair professional give you an estimate with which to counter the insurance company's numbers.
Do I have rights when filing a claim?
Your policy is a binding legal contract between your insurance company and you and it will define any rights and obligations each of you have. Therefore, if you have any questions or concerns regarding your rights as stated under your policy, you should contact your insurance company or agent.
Does filing a claim raise my premiums?
Insurance policies vary from company to company but in general most insurers increase premiums according to a specifiedpercentage for each chargeable claim.
Does auto insurance cover car rentals after an accident?
You can purchase a special rental car add-on to your current policy which covers car rentals in case your car is ever out for repairs. This add-on typically costs about $1 to $2 per month.
How are my auto insurance rates determined?
Your particular auto insurance premiums are based upon a number of factors including any accidents you've been involved in, age, gender, credit rating, location, whether your car is new or used, and most importantly your driving record. If you have a comprehensive policy other factors will come into play including how much of a risk to theft your vehicle is.
How can my credit rating affect my auto insurance?
Credit rating can play a role in determining your auto insurance premiums. Many companies look at how you handle your finances as a sign of how responsible you are. If you have a solid credit history and low debt-to-income, you will likely be viewed more favorably than someone who spends freely and racks up lots of debt.
What is the best way to save money on auto insurance? There are many ways you can save money on your auto insurance policy such as being a safe driver, driver education, and defensive driver discounts. You can also install anti-theft and safety equipment to save even more. Some insurance companies give discounts for customer loyalty or if you bundle several insurance products into one policy.