Auto Insurance FAQ
How is my automotive insurance rate determined?
Insurance companies utilize statistical history to determine the rates needed to cover any potential claims and business expenses. Several factors are used to determine your specific rate, including but not limited to your age, the make and model of your car, your driving record, the car's purpose, where you drive, where the car is stored, your credit rating, etc.
Why do rate quotes vary from one insurance company to another?
An insurance company's claim experience, the types of people they insure, and cost for doing business vary from company to company and may cause rates to differ, sometimes substantially.
Why does my insurance go up if I have an accident or get a ticket?
Insurance companies charge higher rates to drivers with tickets and accidents because they are statistically higher risks. Since claims statistics and studies by law enforcement agencies show that the chances of having an accident increases proportionately to how many tickets and accidents a driver has already had, insurance companies must adjust their rates so the premium accurately reflects the insurance company's exposure to future claims based on this higher risk.
If my car is "totaled", do I get a new one?
Most auto insurance policies provide actual cash value settlements. Actual cash value is based on the cost to replacing a stolen, lost, or damaged item with a new comparable item minus its deprecation it incurred at the time of the incident.
Are other people who drive my car insured under my insurance policy?
To ensure coverage, you should list those individuals on your policy who regularly use your car. In general, those who are given permission to drive your car are covered.
Should family members be listed on my insurance policy?
Any immediate or extended family member who is of driving age that resides with you, including parents, children, siblings, grandparents, and in-laws, should be listed on your automotive insurance policy. This protects both you and the insurance company particularly in the event of any unforeseen emergency situations.
Can the driving record of my family members impact my ability to secure an auto insurance policy?
Yes. The driving or accident record of any licensed family member in your household can affect whether or not the insurance company decides to insure your vehicle and the premium rates they offer you.
Can the insurance company cancel my policy?
An insurance company can cancel an automotive policy if the insured fails to pay their monthly premium or if his/her license has been suspended or revoked during the term of the policy.
Can my automotive insurance company refuse to renew my policy?
Yes. An insurance company has the right not to renew your policy as long as they provide a 30-day notice to the insured and include a specific reason for their refusal.
If I contact my insurance company about a loss but never collected any benefits, do they still consider it a claim?
Any inquiry about coverage in the event of a loss is still considered a claim and part of the claim history of the insured.
What does my auto insurance policy cover when I rent a car?
It depends on your policy. In general, the insured is covered when he/she rents a car on vacation or during business travel. If you do not have comprehensive and collision coverage for your own car, you may not have coverage for a rental car. If you damage a rental car, your policy may not cover lost revenue the rental car company incurs while the rental car is being fixed or the cost of a new car if you total the rental.
I have an older car whose current value is very low. Do I need insurance?
Yes. You should always have bodily injury and property damage. In most states you're legally required to carry a minimum amount.
I plan to buy a new car. Do I need coverage for this car before I drive it off the lot?
Your new car must be insured before you drive it off the lot. If you have a policy in force, the new car will be automatically covered for 30 days. However, if you cover a new car under an existing policy without notifying your insurance company, some companies may change some of your coverage limits until they have received notice from you about the new car, and decided they want to insure it.
What should I do if I have an accident?
First, check to see if anyone needs medical attention. Next, call the police. They will tell you whether you should move the vehicle and whether an officer will come and take statements from those involved. Try to stay calm. If a police officer questions you, be factual. It is not up to you to talk about whose fault it is. The police and insurance companies will decide that. If law enforcement is not involved, exchange names, addresses, phone numbers and insurance company names with each driver. Try also to get contact information for any witnesses. Contact your insurance company or insurance agent as soon as possible to learn about conditions or procedures you need to follow.
What do I do if I get in an accident with an uninsured motorist?
If you should get into an accident with an uninsured motorist, contact you state's Department of Revenue to enforce the financial responsibility laws of your state. Be sure to report any losses to your insurance company under the uninsured motorist portion of your policy.
What is an extended warranty?
An automotive extended warranty is a service contract on your vehicle between the warranty company and you. You pay the warranty company on an annual or monthly basis and they pay for any car repairs covered by the contract. Auto warranties are NOT insurance policies.