Auto Insurance FAQ’s
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.
Why automobile Insurance coverage is mandatory?
Automobile insurance is mandatory in all of the United States. Most State law requires all motorists to have
- Bodily Injury
- Property Damage
- Uninsured Motorist coverage
If your vehicle is financed, your auto lender will require that you have these two additional coverage’s collision and comprehensive. These will protect you and the auto lender if your vehicle suffers damage or loss.
What is a deductible?
A deductible is the amount of damages that you agree you will be responsible for if you have a claim. Most insurance policies have a deductible which states that a portion of the amount paid for the loss will be subtracted (deducted) from the amount the insurance company would otherwise pay. This amount is not paid to the company; it simply becomes your share of the loss and is deducted from the payment. Typically deductibles range between $500.00 to $1,000.00.
Why do I have a deductible?
Deductibles have several functions. Like shifting the cost of small claims to the person buying the insurance (insured) enables the insurance company to reduce premiums. Small dollar claims often cost more to adjust and settle than the claim. The cost of insurance would be much higher if there were no deductibles. The higher the deductible, the lower your premium cost.
Do I have a deductible on my auto policy?
Yes, all auto insurance policies including collision coverage’s and comprehensive coverage’s are subject to a deductible. Several options are available to change or adjust your deductible amount. The amount of the deductible is shown on your declaration pages. The lowest cost coverage you can get is determined by the deductible amount, specific coverage plan and the amount of financial protection you choose.
Which coverage do I need by law?
You should ask your insurance agent or contact your states insurance department. Remember coverage limits vary from state to state. Regardless, you should always make sure you get at least the level of coverage required by your state law. Also, if you need to have comprehensive coverage and collision coverage or you want other optional coverage’s, they are available from your insurance company.
How much coverage will I need?
You will need choose as it depends on your personal needs and the amount you wish to spend. Comprehensive coverage and Collision coverage might be required by your auto lender and they may also require you have a specific deductible.
How you can control the cost of my car insurance?
Suggestions to keep your rates as low as possible:
- Drive Carefully and Do Not Get Any Tickets
- Select a safer Auto for your Vehicle
- Carry a Higher Deductible
- Examine the amount of your coverage’s
- Discounts from memberships
- Safe Driving Classes every 3 years
How do insurance companies determine premium amounts auto insurance?
These are some of the factors that determine premium amounts:
- Type of Car you drive
- Safe Driving record
- Miles you drive daily
- Where you live
- Your Age
What is Collision coverage?
Collision provides protection for the loss of an automobile by impact with another vehicle or object.
What is Comprehensive coverage?
Comprehensive covers damage to the automobile from risks such as falling objects, fire, theft, explosion, hail, water, flood, vandalism and other losses.
If you rent a vehicle is covered by your insurance?
Most personal auto insurance policies do extend coverage to rented private passenger automobiles for temporary use by the named insured. There are several factors to consider when determining your need to purchase rental car coverage. You should check your policy for coverage regarding rented vehicles.
What are some of the optional automobile coverage’s available?
Some of the coverage’s that are available include:
- Comprehensive coverage
- Collision coverage
- Rental care coverage
- Emergency Road Service
Check with your insurance company
Is there a discount for having auto and home coverage insured with company?
Yes, most companies offer a discount which is usually around 10% of your premium amounts.
What payment options are available?
Most insurance companies offer the following pay modes:
What discounts do insurance companies offer on auto insurance?
- Safe Driver Discount
- Multi-Vehicle Discount
- Occupational Discounts
- Preferred Driver Discount
- Membership Discounts
- Safe Driving Class Discount
What do you do if you have an automobile accident?
- Call the police and report the accident
- Determine if anyone is injured and get their names
- Get the name, address, license plate number of other drivers involved
- Get the name of the other drivers insurance company
- Get the names and addresses of any witnesses
- Notify your insurance agent and claim department as soon as possible
Does your auto policy provide coverage for anyone that drives?
Your liability insurance coverage extends to other drivers whom you allow to drive your vehicle. Drivers who are not family members residing in your home or whom are not listed as a driver on the policy are given a reduced liability coverage. All are covered except for the individuals specifically excluded under a driver restriction endorsement.
Do you have coverage for a rental car while my car is being repaired?
Only, If you have purchased this option, your policy will reimburse you for rental car expenses you incur during the time your vehicle is being repaired from a covered loss, subject to the insuring agreement and coverage limits. Most insurance companies offer this endorsement on auto insurance policies.