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Auto
insurance protects you against financial loss if you have 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.
- Liability coverage pays for your legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
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 to a year. Your insurance
company should notify you by mail when it’s time to renew the policy
and to pay your premium. |
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| Auto Insurance - What is Auto Insurance |
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Auto insurance protects you against financial loss if you have 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...
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| What is covered by a basic auto policy? |
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| Your auto policy may include six coverages. Each coverage is priced separately.
1. Bodily Injury Liability
This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the polic... |
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| Can I drive legally without insurance? |
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| NO! Almost every state requires you to have auto liability insurance. All states also have financial responsibility laws. This means that even in a state that does not require liability insurance, you need to have sufficient assets to pay claims if you cause an accident. If you don’t have enough assets, you must purchase at least the state minimum amount of insurance. But... |
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| What if I lease a car? |
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| If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage. You'll need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.
Collision c... |
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| Do I need insurance to rent a car? |
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When renting a car, you need insurance. If you have adequate insurance on your own car, including collision and comprehensive, this may be enough.
Before you rent a car:
- Contact your insurance company.
Find out how much coverage you have on your own car. I... |
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| Is there a difference between cancellation and nonrenewal? |
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There is a big difference between an insurance company canceling a policy and choosing not to renew it. Insurance companies cannot cancel a policy that has been in force for more than 60 days except when:
- You fail to pay the premium
- You have committed fraud or made serious misrepresentations on your application
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| How do I choose an Insurance Company |
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There are many insurance companies, so choosing between them can be a challenge. Here are the main points to keep in mind when selecting an insurance company:
Licensing
Not every company is licensed to operate in each state. As a general rule, you should buy from a company licensed in your state, becaus... |
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| Where can I buy insurance? |
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| You can buy insurance through your local insurance agent and through insurance companies that sell through their own employees, over the phone, by mail and over the Internet. Consult your state insurance department, the yellow pages of your phone book, and friends or relatives for the names of insurance companies doing business in your state. In most states, there are dozens, s... |
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| How can I save money? |
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| The price you pay for your auto insurance can vary by hundreds of dollars, depending what type of car you have and the insurance company you buy your policy from. Here are some ways to save money.
Shop around
Prices vary from company to company, so it pays to shop around. Get at leas... |
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| How much coverage do I need? |
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| Almost every state requires you to buy a minimum amount of liability coverage. Chances are that you will need more liability insurance than the state requires because accidents cost more than the minimum limits. If you’re found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs co... |
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| What determines the price of my policy? |
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There are many factors that influence the price you pay for auto insurance. The average American driver spends about $700 a year. Your premium may be higher or lower, depending on:
- Your driving record.
The better your record, the lower your premium. If you've had accidents or serious traffic violations, you will pay more ... |
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| What information do I need to give to my agent or company? |
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Your agent will ask you what make and model cars you own, roughly how many miles you drive each year, and what kind of liability coverage you will need. The agent will also want to know how many people drive the cars, how old the drivers are, where you live, and driving records of each household member.
The agent will then ask more detailed... |
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| What can I do if I can't find coverage? |
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There may be several reasons why you can’t get insurance through traditional private insurance companies:
- You have a poor driving record
- You own a special, high performance car
- You have not driven long enough
- You have not owned your car very long and th...
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| How do I insure my teenage driver? |
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| As soon as your teenager begins to drive, notify your insurance agent that there will be an additional driver in the house. Since teenagers are inexperienced drivers, they tend to get into a lot of accidents. This will, unfortunately, be reflected in higher insurance rates. If you have a daughter, you can expect your insurance to go up as much as 50 percent... |
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| Should I purchase an umbrella liability policy? |
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If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgements against you and your attorney's fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That's what a personal umbrella liability policy provides.
An umbrella pol... |
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| Will my insurance cover a rental car after an accident? |
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Many drivers don't think about their insurance coverage until after they have an accident and call their insurance company to file a claim to help pay for car repairs, a rental car and other expenses.
Unfortunately, many insured drivers are surprised to find out that their auto insurance does not automatically cover the cost of a replacement rental car after an ... |
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| Can my insurance company require me to use certain types of auto repair parts? |
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Your insurance company can't require you to use only certain kinds of auto repair parts. However, if the insurance company's rates are based on a certain type of part and you want something different, it can ask you to pay the difference if the part you want is more expensive.
The parts most frequently damaged in auto accidents are "crash parts". These ... |
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| How do I file a claim? |
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To file a claim, follow these steps:
- Call your insurance agent as soon as possible, regardless of who is at fault. Find out whether you're covered for this loss. Even if the accident appears minor, it is important that you let your insurance company know about the incident.
- Ask your agent or company representative how to p...
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| What should I do if I am having trouble settling my claim? |
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If you are not satisfied with how your claim is being handled, there are steps you can take.
- Let your agent or company representative know that you are unhappy.
If the agant or representative is unable to solve your problem, get the name and phone number of the head of the insurer's claims department. Your insurance company may a... |
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| If I file a claim, will my premium go up? |
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| You may be reluctant to file a claim because you fear that your premium will go up or your insurance will be canceled. Practices vary from company to company. In general, an insurer will increase your premium by specific percentages for each chargeable claim made against your policy above a specific dollar amount. A chargeable claim is one the insurer con... |
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| How are the value of my car and the cost of repair determined? |
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| There are several standard guidelines for determining the value of your car for insurance purposes. You and your insurer can refer to one of the Blue Books, which list the depreciated value of all new and used cars. One Blue Book is published by the National Association of Automobile Dealers ( Read more |
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| What are my rights when filing a claim? |
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As a policyholder, you have certain rights. Every state has laws protecting consumers. Your policy is a legal contract between you and your insurer. It defines your rights and obligations as well as the rights and obligations of the insurance company.
If you have any questions regarding your ri... |
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| Can my insurance company require me to use certain types of auto repair parts? |
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Your insurance company can't require you to use only certain kinds of auto repair parts. However, if the insurance company's rates are based on a certain type of part and you want something different, it can ask you to pay the difference if the part you want is more expensive.
The parts most fre... |
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| Shopping for a Safe Car |
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| If you’re like most people shopping for a new car, safety ranks high among things you're looking for. Every new car must meet certain federal safety standards, but that doesn’t mean that all cars are equally safe. There are still important safety differences, and some vehicles are safer than others... |
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| At the Scene of an Accident |
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Knowing what to do if you are involved in an accident can save lives and also make the claims process easier.
- Stop your car and find out if anyone is injured.
- Call the police or highway patrol. Tell them how many people were hurt and the types of injuries. The police will notify the nearest medical unit.
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| Car Breakdown Safety |
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If you are in an accident or your car breaks down, safety should be your first concern. Getting out of the car at a busy intersection or on a highway to change a tire or check damage from a fender bender is probably one of the worst things you can do. The Insurance Information Institute (I.I.I.) recommends the following precautions when your car breaks down:
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| Child Safety Seats |
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| If you have children it's important to make sure they are secured properly when you drive with them. They are almost always safer when riding in the back, in a car seat that is appropriate to their age and weight.
Using a car seat correctly can prevent injuries, but wrong usage is very common. Even a small mistake in how the sea... |
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| Cell Phones & Driving |
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Drivers who are distracted by talking on a cell phone or dialing numbers while they are driving are causing more and more accidents. Some municipalities have banned using cell phones while driving because it has caused such a major problem.
If you must talk while you drive, the safest way is to have a hands-free cell phone cradle installed... |
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| Road Rage |
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Increasingly crowded highways and traffic backups cause many drivers to lose control and become extremely aggressive.
If you encounter aggressive drivers, don’t challenge them, and stay as far away as possible. You may want to take down the license plate number and report their behavior to police so they won’t hurt themselves or someone else.... |
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| Elderly Drivers |
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People 55 years or older are less likely to drive aggressively or too fast. That’s the reason that most insurance companies offer discounts to drivers over 55.
Still, older drivers are more likely to have impaired hearing and slower reflexes, or to be using prescription drugs that might slow down their reaction time. Older drivers&rs... |
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| Preventing carjacking or theft |
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Thousands of unsuspecting motorists are carjacked every year.
To minimize the danger of being carjacked:
- Think of saving your life first. Only then, think of your car and what's in it.
- If another car bumps your car, stay inside with the windows shut and the door locked and drive to the neares...
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| Driving in Bad Weather |
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| Driving in bad weather is a major cause of accidents. When you are driving, particularly on a long trip, make sure to stay tuned to radio reports about weather conditions. If you hear that an ice storm, hurricane, tornado, flood, hail or other severe weather is expected on the route you are taking or at your intended destination, change your travel plans.... |
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| Avoiding Deer/Car Collisions |
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| The explosion in the deer population has lead to a continuing increase in deer-car collisions. This trend will only increase as the deer population grows and urban habitats continue to encroach upon rural environments.
According to the National Safety Council, there were 530,000 animal-related accidents in 2003 and these collisi... |
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| Auto Insurance for your kids |
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Auto insurance can be very expensive for young drivers. Parents are often worried (with good reason) when a young adult reaches driving age. Here are some things that can help manage the risk and cost.
My opinion is that a young driver should generally not be given a car and insurance without cost or obligation. If the young adult has to work or make a ... |
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