Auto Insurance FAQ

What car insurance coverage is considered mandatory in my state?
"Different states require different amounts of insurance coverage. Liability insurance is required by most of the states. Even though few states still allow presenting the proof of financial responsibility, all states establish the minimum liability insurance limits that any policy has to cover. You should contact your state authorities to find out what car insurance coverage is considered mandatory."

What different insurance coverage types are available?
"There are many different insurance types that could be available in your state. There are some specific coverage types that can be available only in one state. However, most of the states will offer the following basic insurance coverage types: bodily injury liability, personal injury protection (PIP), property damage liability, collision coverage, comprehensive coverage and uninsured motoristsí protection."

What does each number in the state minimum insurance limits mean?
The state minimum limits will be represented by 3 numbers in the following form: #1 / #2 / #3. The first number specifies the coverage (in thousands) for bodily injury for any one person. The second number specifies the coverage (in thousands) for bodily injury for all persons injured. The third number specifies the coverage (in thousands) for property damage.

Could you provide an example of how the state minimum insurance limits are used?
"The state minimum limits for Wyoming car insurance are set to 25/50/20. This means that Wyoming car insurance policies have to provide at least $25,000 coverage for bodily injury for any one person, $50,000 coverage for bodily injury for all persons injured and $20,000 coverage for property damage."

Who can I contact for more information on state minimum insurance limits and requirement?
You should check with your stateís department of insurance since it usually establishes the minimum insurance coverage limits that any insurance policy has to meet to qualify. You can also contact the Department of Motor Vehicles for additional information.

What auto insurance coverage will be required if I lease of finance my car?
Different financing companies or banks will have different requirements but in most of the cases you will be required to purchase comprehensive and collision coverage in addition to the basic liability coverage required by your state.

Can I get auto insurance coverage for more than one car?
"Yes, you can add several vehicles on one insurance policy. The maximum number of vehicles allowed will vary depending on the insurance company but on average you will be able to add at least 4 vehicles to the insurance policy."

Is there a way to get a discount for adding more cars to one policy?
"Yes, many insurance companies will offer you a discount when you add a second car to the same policy. The average discount is usually around 10% Ė 15% but the actual discount amount varies from company to company."

Is there a way to share the car insurance policy with other people?
"Yes, most of the insurance companies will allow you to add additional people to your policy. You will usually be listed as the primary policyholder and primary driver. Additional people will usually be listed as second drivers and/or secondary policyholders."

What can happen if I drive a car without insurance? Could you provide examples?
"In most of the states driving without insurance is considered a violation of the state law. There is a certain punishment for this violation that may include such things as fees, registration and license loss or suspension and even a jail term."

Could you provide specific examples of penalties for driving a car without insurance?
"Driving without insurance in West Virginia can be punished by a revocation of vehicle registration and suspension of driverís license for a 90 day period. Driving without insurance in Utah can result in several penalties: a fine of $400 to $1,000 and a loss of driverís license and/or vehicle registration. The penalty for driving without insurance in North Carolina is the suspension of registration for a 60 day period."

Is there anything that I can do if I get denied by insurance companies? Could you provide examples?
"If you are not able to obtain a policy for some reason, you should check if your stateís insurance department offers a guaranteed insurance coverage program. This type of program will offer state residents the guaranteed minimum level of coverage. For example, residents of Minnesota can apply for the Minnesota Auto Insurance Plan, residents of Virginia can apply for the Virginia Automobile Insurance Plan and Texas residents can apply for the Texas Auto Insurance Plan Association program."

What is computer data law?
The computer data law requires insurance companies that sell car insurance policies in a certain state to provide the full list of current insurance policies to the stateís Department of Motor Vehicles and/or stateís department of insurance.

What is so unique about the insurance system in the state of Michigan?
"The state Michigan has a no-fault insurance system that is unlike most of the other states. For example, in Michigan drivers are not allowed to sue other people who were involved in the accident with them. The only exception is when someone is seriously injured or killed. Drivers can also get unrestricted medical treatment, wages loss and rehabilitation benefits for up to three years after the accident in Michigan. The no-fault car insurance would also include vehicle damage protection in this state."

What are the typical factors that will affect my insurance rate?
"There are many different factors that can influence your insurance rate. Whether some specific factors will be used will depend on the policies of each insurance company and the laws and regulations of each state. The list of typical factors that may have an influence on your insurance rate includes: your zip code, insurance coverage gaps, your personal driving record, your family membersí driving records, the type of your vehicle, your yearly mileage and your credit history."

What optional coverage types can be useful?
In many cases is it useful to include rental car reimbursement coverage and emergency road service as a part of your insurance policy. The rental car reimbursement coverage will pay for your rental car expenses if your vehicle was damaged or stolen. The emergency road service coverage allows you to pay for towing expenses if your vehicle becomes inoperative.

Would adding safety features to my car lower my insurance rate?
"Most of the insurance companies would offer you a discount if you add certain features to your vehicle. For example, many insurance companies provide discounts for such safety features as alarm systems, head restraints, seat belts, air bags and ABS Anti-lock brakes."

Can my insurance company cancel my policy before the expiration date?
"In many states insurance companies are allowed to do that but there are usually some restrictions. Some states place restrictions on the number of days allowed for cancellation. Other states place restriction on cancellation reasons (no cancellation because of the employment or tenant status, for example)."

What insurance document will I get when I order car insurance online?
You will usually be able to print out the temporary proof of insurance (insurance ID card) as soon as you make your insurance payment. The official proof of insurance policy will be sent to you in a few days by email or by mail.

What is the usually policy term for car insurance?
The actual term can differ among different states and different insurance companies but the usual insurance policy term is 6 months.

What should I do when my insurance term is about to be over?
Your insurance company will most likely notify you when your term is about to end and will offer you to renew your insurance policy. You should examine the insurance rate that your current insurance company is offering you for the next term and compare it with rates offered to you by other companies. Then you should make a selection based on a combination of factors such as insurance cost and experience that you had with certain companies.

What is the easies way to compare rates between different insurance companies?
Using instant online quotes is probably the easiest and most effective way to obtain and compare insurance rates offered by different companies. This should definitely be a part of your insurance policies research and pre-selection process. Some websites may even offer you to obtain rates from several companies and provide the comparison result to you.

Will I be able to modify my insurance policy after I order it?
"Yes, most of insurance companies will allow you to make various changes to your insurance policy including such activities as adding or removing vehicles, adding or removing additional drivers and changing deductibles."

What is a car insurance claim and when would I need to submit one?
"A car insurance claim is a request to be compensated for a loss covered by the insurance. If you receive damage to your vehicle from crash or vandalism or personal injuries from an accident, you will usually have to file a claim request to be compensated for your expenses."

Who will handle my claim if I submit one?
"The insurance company will usually assign one of its insurance professionals to handle your claim. This will usually be an adjuster Ė an employee who will examine, inspect and resolve your car insurance claim."

What will prevent my car from being stolen?
"You should always install some type of an alarm system in your car, whether it is a passive alarm system that is turned on automatically when someone attempts to break into the vehicle or the non-passive alarm system that you have to turn on manually before you leave the vehicle."

What will help to quickly find my car if it is stolen?
"If it is possible, you should have an anti-theft recovery system installed in your car. This system will be activated if the car is stolen and will produce a signal that can be used by police authorities to locate your vehicle. You might even get an insurance discount for having the anti-theft recovery system installed in your vehicle."

"If I need to have my car repaired, can I select any repair location?"
"Many insurance companies will allow you to use any body shop or repair location to fix your car. They will, however, provide you with suggestions about the best possible locations."

Do insurance companies consider the color of the car for rates calculation?
No. Insurance companies usually donít consider the color of the vehicle in the calculation of insurance policy premium.

Is there any way to reduce the premium for the collision coverage?
"If you would like to reduce your collision coverage expense, you will need to do one or both of the following: reduce the coverage limits or increase the deductible."

Is collision coverage required in any of the states?
At this time there are no states that made the collision coverage mandatory. Most of the states require only the liability coverage and keep the collision coverage as an optional level of protection.

What is SR-22 form?
SR-22 is a special form that serves as a proof of your car insurance. It is a mandatory form for high-risk drivers in many states.

"If I am moving to another state for some time, do I need to purchase new insurance in that state?"
"Different states have different laws, but it is generally advised to purchase the insurance policy for the new state if you are moving for more then 6 moths."

Would my insurance premium rise if I am involved in an accident and I am not at fault?
Most likely your insurance payments will not increase if you were not at fault during the accident.

What coverage types will pay for the physical damage to the car?
Either comprehensive coverage or collision coverage will be used to cover the damage for your vehicle.

Is there a way to protect myself from drivers who donít have sufficient insurance?
"Yes, in many states you can purchase uninsured motorist coverage and sometimes even the underinsured motorist coverage that will offer you this type of protection."

What are the steps I need to follow in case of an accident?
"First you should contact the police, collect other party's identification and insurance information and get a copy of the police report. You next step is to contact your insurance company as soon as it is possible."

Why should I try to take pictures of the vehicles involved in an accident?
"If it is possible, you should take these pictures. The reason for this is that you can protect yourself from the possibility that other party will claim more damage than there actually is."

What states usually have the lowest average insurance expenditures in the nation?
"According to the National Association of Insurance Commissioners, North Dakota, South Dakota, Iowa, Idaho and North Carolina had the lowest average insurance expenditure in the nation in 2003."

What states usually have the highest average insurance expenditures in the nation?
"According to the National Association of Insurance Commissioners, New Jersey, New York, District of Columbia, Massachusetts and Florida had the highest average insurance expenditure in the nation in 2003."

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