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Frequently Asked Questions
What is auto insurance? Drivers purchase auto insurance for vehicles such as trucks or cars to protect them from losses that may occur when they are driving them. Am I required to purchase auto insurance if I own a vehicle? If you drive a vehicle in the USA or Canada, you are legally required to purchase auto insurance. What is the main reason for requiring auto insurance? Auto insurance provides drivers with peace of mind, as well as financial security if they are ever involved in an accident. Will I be covered by my insurance company if I am sued? Your insurance company will cover you up to the amount specified in your liability insurance if you or another individual driving your car ends up injuring someone or causing property damage. What are the main types of auto insurance? The three main kinds of auto insurance include comprehensive coverage, collision coverage and liability coverage. What is comprehensive coverage? This type of insurance covers any damages to your car that are not caused by other drivers such as fire, storms, floods, hail, theft, collision with an animal or vandalism. What is collision coverage? This type of insurance covers any physical damage to your vehicle that occurs as a result of a collision including hitting another vehicle or an object such as a light post. What is liability coverage? A minimum amount of liability insurance is required in almost every state, and it differs according to where you live. Drivers are required to purchase this type of insurance to cover any losses you might cause to an individual or to someone’s property. How do I know the minimum amount of liability insurance required? Although all drivers require a minimum amount of liability insurance, the amount varies from state to state. Therefore, you need to contact your insurance provider to find out the exact amount in your area. What kind of optional coverage can I choose? There are many options above your minimum required policy. These include collision insurance, family protection coverage, transportation replacement, etc. Am I required to pay a minimum amount of comprehensive or collision coverage? No, since the only type of insurance that is required is liability, there is no minimum required for comprehensive or collision coverage. Do I have to purchase auto insurance if I lease a car? Yes, you will be required to purchase liability insurance if you lease a car. Your bank or auto dealer will also require that you purchase collision and comprehensive coverage. What is a premium? The yearly fee that you have to pay your insurance provider is called a premium. What is a deductible? A deductible is the partial amount of a loss you have to pay before your insurance company is responsible for paying any claim filed under your policy. For example, if your covered claim is $4000 and your deductible is $1000, you will pay $1000 and your insurance provider will pay the remaining $3000. Can my insurance company cancel my auto policy? Yes, if you fail to pay your premium or if your license has been revoked or suspended during the term of the policy, your company can cancel your policy. What should I do if feel my insurance company has cancelled my policy unfairly? If your insurance provider never provided a reason for the cancellation or you disagree with the reasons indicated, you should contact the consumer affairs division of your insurance company. What should I do if I don’t receive a satisfactory response about the unfair cancellation of my policy from the consumer affairs division? In this case, we suggest you contact your state insurance department to discuss the issue. If I contact my insurance company to verify whether a loss is covered under my policy, can they record this as a claim, even if I don’t receive any money from the insurer? Yes, every claim is recorded by your auto insurance company. What should I do if I have an accident with an uninsured motorist? The first thing you should do is to contact the Department of Revenue in your particular state. They enforce the local liability laws, and they will perform an investigation of the accident. What will uninsured motorist coverage cover? Uninsured motorist coverage will protect you from hit-and-run drivers, and it will cover you for any injuries you sustain while driving or as a pedestrian. It applies to bodily injury only and will not cover any damage to your vehicle. Will other people be covered if they drive my car? Any person who has permission to drive your car is generally covered. This is why you should list any individuals who regularly drive your vehicle on your policy. Why do I have to list all household members, even if they don’t ever drive my car? Listing all residents of your household who are old enough to drive must be listed in order to protect you and your insurance provider. Which individuals are considered “family members?” Generally, family members are considered any extended or immediate family members who are of legal driving age, including parents, children, grandparents, aunts, uncles, siblings, cousins, foster children, in-laws and step family members. You should check with your particular insurance provider for an exact list. Which household members don’t need to be included on my policy? You don’t need to list any roommates who are not family members and don’t drive your vehicle or any non-family household residents who don’t drive your vehicle. Will I be covered by my auto policy if I rent a car? Generally, rental car coverage is only offered if you rent a car while you are on vacation. You should always contact your insurance company to specify the details of rental coverage. Will my spouse’s or children’s accident records affect my ability to purchase car insurance? Unfortunately, the driving record of any licensed driver who lives in your household will affect your ability to receive car insurance. You may be turned down for coverage or be required to pay high-risk insurance premiums. Can my company refuse to renew my policy if I have too many claims? Yes, your insurance company can refuse you if you have made as little as one claim, regardless of the dollar amount. However, your insurance provider is required to give you 30-days notice and an exact reason why there are refusing to renew your policy. What happens if I forget to include some information on my driving record? Your provider will verify all your claims and driving records before issuing your policy. The insurance company also bases their quotes on the information you submitted. If you notify your provider of the omission, your insurance premium will be adjusted to reflect your actual driving record. What does actual cash value mean? Because there are so many used vehicles on the road, every auto policy is written for actual cash value or ACV. This means that the values of your auto settlement are determined by similar vehicles currently on the market. ACV is based on the cost to replace your vehicle with similar new one, minus the depreciation based on the age of your vehicle. What does replacement cost coverage mean? Replacement cost coverage equals the cost of a new vehicle with no depreciation. What factors affect my auto insurance rates? Many difference factors can affect your rate, including the age, make and model of your vehicle, the purpose of your vehicle, where you drive it, your credit rating and your driving record. How do companies determine auto insurance rates? They compile statistical history to determine the current rates for auto insurance. The rates are based on the amount of money necessary to pay for all company business expenses and claims. Why are the rates so different for different insurance providers? The rates differ because of many factors including the varying costs of doing business for each particular company and the different claims experience. Companies base current information on their experience dealing with past claims in your area. Will my policy automatically increase after I file a claim? Your first claim will not necessarily affect your claim. This depends on many factors including the laws and regulations in your state, the length of time you have had insurance and your particular policy. You should inquire about details with your auto insurance provider. What is considered a high-risk driver? High-risk drivers are ones who file numerous claims within a short period of time, take intentional risks such as car racing or speeding or who cause an accident while driving under the influence of alcohol or illegal substances. Can my insurance provider cancel my policy if I am a high-risk driver? Yes, your insurance company may decide to cancel or non-renew your policy if you are considered a high-risk driver. This depends on the laws in your particular state. Will I lose my safe driving discount if I file a claim? If you are found at fault in an accident, you will most likely lose your safe driving discount. Do I have to file a police report if my vehicle is stolen? You should always file a police report if your vehicle is ever stolen or damaged. Do I have to file a state motor vehicle report? This is required by certain states, so you need to check with your insurance provider to see if it’s required in your area. Will my insurance provider investigate any cases of potential fraud? Yes, your insurance company will attempt to identify and address any possible fraudulent claims. Therefore, you should contact your company immediately if you suspect fraud. What is no-fault insurance? No-fault insurance will pay for the injuries and property damage caused to yourself, up to a specified limit indicated in your policy. This type of insurance varies according to each state, so you should check with your insurance company for details. What is medical payments coverage? This type of insurance protects you, any covered family members and covered passengers. It will pay for required medical treatments relating to any bodily injuries caused by an accident, regardless of who was responsible. What is bodily injury liability coverage? This type of insurance protects you from any liability claims resulting from accidents that were caused by you and injure another individual. Your policy will cover you and any family members listed on your policy who are driving your vehicle or another person’s vehicle with their permission. What is personal injury protection? Personal injury protection or PIP covers you or any covered passengers or family members for bodily injury resulting from an accident, regardless of who is responsible. Necessary expenses such as child care, funeral, medical and hospital are covered. You should always consult your insurance provider, since PIP coverage is not available in every state. What is uninsured/underinsured motorist coverage? This type of insurance generally covers any damages caused to you or your property by another driver who does not have any auto insurance or does not have sufficient insurance to cover the damages. How long will my claim take to process? The length of time required to complete each claim is based on many different factors including the number of parties involved in an accident and the severity of the damage. You can contact your claims representative to get a better idea of the approximate timeframe required. How long will it take to recover my deductible? Your insurance provider may attempt to recover your deductible from the driver responsible for your accident. The length of time required is based on several factors including whether a collection agency or attorney is required, the person responsible has insurance and everyone agrees on the reported facts concerning the accident. Will any property stolen from my vehicle be covered in my policy? This depends on exactly what was stolen from your vehicle and whether you chose to purchase optional coverage. Certain items such as sports equipment may be covered under your homeowner’s or renter’s insurance, rather than your car insurance. What should I do if my stolen vehicle is recovered? If the police contact you to advise you that your vehicle has been recovered, request a brief description of any damage to your vehicle and then contact your claims representative immediately. What should I do if my vehicle is totaled? Many factors regarding whether to declare a vehicle a complete loss or repair it are considered. These include the age of your vehicle, the laws in your state, as well as the type and extent of the damage. If the estimated cost of repairs is higher than the worth of your vehicle, your insurance provider will pay you the actual cash value of your vehicle up to the amount specified in your policy, minus your deductible. Who will pay the remainder of my loan if my vehicle is totaled? Your insurance company will pay the actual cash value of your vehicle for any covered losses up to the limit specified in your policy, minus your deductible. You will most likely be responsible for the remainder of the loan in excess of the amount of your claim settlement. Who is responsible for any lost wages if I can’t continue working? Lost wage reimbursement varies depending on your particular state and the type of coverage you purchased. Therefore, you should contact your claims representative. What happens if I am involved in an accident in another state? Your insurance provider will usually be able to handle your claim in the state where the accident occurred. If it is not convenient to have your vehicle inspected in that state, your insurance provider can arrange for a local inspection. Will my policy cover the cost of renting a vehicle while my vehicle is being repaired? Your auto insurance policy will cover the cost of renting a vehicle up to the limit specified in your policy if you chose to purchase rental reimbursement coverage. How do I know which representative will handle my claim? Different claims representatives specialize in different types of claims so they will be assigned to your case based on the facts of your particular situation. Can I purchase auto insurance if I have a learner’s permit? Yes. In fact, you are required to purchase auto insurance, regardless of the current status of your license. Can I purchase auto insurance if I have a foreign or conditional license? Yes, you can purchase auto insurance for any type of license, including a foreign or conditional one. How will I know the actual salvage value if my car is totaled? You can contact a local salvage yard to get an estimate of the value. A reasonable estimate is usually 15 to 20% of the retail value of your vehicle at the time of the accident. What are the most inexpensive cars to insure? The 10 least expensive cars to insure are a Buick LeSabre, Oldsmobile Silhouette, Honda Odyssey, Buick Park Avenue, Pontiac Montana, Mercury Grand Marquis, Buick Century, Chevrolet Venture, GMC Safari and Oldsmobile Bravada. How can I find the insurance records for the previous owner of a car? You should contact your state department of insurance to inquire about their specific disclosure laws. How much will the cheapest car insurance cost? The amount of insurance you are required to pay is based on many different factors including the state you live, your claims history, your credit score and your driving record. Will my insurance cover the cost to replace a cloudy and pitted windshield if I purchased complete glass coverage? This depends on your insurance provider. The cost may be covered, but any spider cracks will definitely be covered if you have chosen to purchase complete glass coverage. How does an insurance company define a sports car? This depends on the particular insurance company. They take into account factors such as the horsepower, stock and modifications made to a vehicle. What happens to my auto insurance if I am charged with a DUI offence? You will most likely lose your auto insurance coverage if you are charged with drinking and driving. However, you should inquire with your particular insurance company as the policy varies. Does my auto insurance policy have to contain the same name as my car loan? Most insurance companies require that the name of the registered car owner is on the policy. However, certain companies may issue policies to someone who does own the vehicle. Which states are no-fault states? Florida, Michigan, New Jersey, New York, Pennsylvania, Hawaii, Kansas, Kentucky, Massachusetts, Minnesota, North Dakota and Utah, as well as Puerto Rico, all offer some form of no-fault insurance. You should inquire with your particular insurance provider regarding details. Can I insure another person’s car? Yes, you can choose to insure someone else’s property if you have authorization to do so or you have an insurable interest in that property. Will my auto insurance cover my relatives who have international driver’s permits? Your insurance policy will cover them if you choose to add them to your auto insurance policy when they visit and drive your car. Who is responsible for a mistake on my insurance forms? This depends on your particular insurance provider. However, most auto insurance companies allow a grace period of 15 to 30 days for adding a new vehicle. If your policy was cancelled or has expired, you may not quality for coverage. How can I lower my insurance premiums? You can lower your premiums by keeping a clean driving record, maintaining consistent coverage and taking a defensive driving or driver improvement course. What is a declarations page? A declarations page is a report issued by your insurance provider that indicates your coverage, limits, drivers insured, cost of coverage and vehicles covered. Why do I have a harder time obtaining auto insurance if drivers in my household have a bad driving record? Many insurance companies will not insure you or will not offer you a preferred rate if you live with a family member with a poor driving record. However, some companies will exclude this person from your insurance policy so you should check with your insurance provider. What will happen to me if I choose to drive without car insurance? You will be subject to penalties according to the particular laws in your state if you are caught driving without proper car insurance or you are involved in an accident without any insurance. The penalties could include a loss of driving privileges or fines. What is a high risk driver? A high risk driver is one who has received many tickets, been involved in multiple accidents or who was charged with driving under the influence. Young, inexperienced drivers may also be classified as high risk. What does assigned risk mean? Most states have an assigned risk plan established to ensure that all drivers will be able to receive coverage. High risk drivers may be charged a lot higher for their insurance policy, but they will be accepted for coverage. What does an assessable policy mean? This means that you can be charged or assessed an additional amount if your particular insurance company experiences a bad year with many expensive accidents. Most auto insurance policies are non-assessable. Am I eligible for any kind of discount on my insurance policy? You should check with your auto insurance provider because many companies offer discounts for insuring multiple vehicles, low mileage, anti-lock brakes, non-smokers, accident free driving records, security and safety devices or driver education courses. Will I be charged more if I choose to pay my premiums on a quarterly or monthly basis? Most companies charge an administrative fee to pay your premiums quarterly or monthly, rather than annually. You should check with your particular insurance provider. What is split-limit liability car coverage? Split-limit coverage uses 3 different numbers to specify the limits for bodily injury liability for each person, property damage liability and bodily injury liability for a single accident. What is single-limit liability car coverage? Single-limit liability car coverage gives only 1 number that is the maximum coverage for property damage and bodily injury together. Should I bother purchasing collision coverage if I own an older vehicle? You may be able to save money by eliminating collision coverage from your insurance policy if you own an older vehicle that is not worth much. You should check with your insurance provider to find out how you can save. If I am involved in an auto accident as a pedestrian, will bodily injury liability still apply? Yes, bodily injury liability will pay for any losses resulting from another driver. If someone hits you with their vehicle, their bodily liability insurance will pay for your expenses. What happens if I am involved in an accident while I’m driving someone else’s car? You will be covered by the insurance of the car owner so he/she should contact the insurance company to file a claim. Will my auto insurance policy cover a rental truck that I use to move my personal property? Your car insurance policy may cover you if the vehicle is a pickup or van. However, you will need to purchase additional coverage from the rental company if you wish to rent a truck. What is gap insurance? Gap insurance provides coverage if your car is totaled, and it pays for the gap between the actual cash value of your car at the time of the accident and the amount due under the lease. Will my auto insurance policy cover me if I use my car in a car pool? Yes, you will be covered by your auto insurance policy if you operate a non profit-making car pool where drivers take turns driving and are reimbursed for their expenses by the other drivers. Will my auto insurance policy be valid if I drive in Canada? Most American auto insurance policies will provide coverage if you drive in Canada, as long as you bring proof of insurance with you. Will my auto insurance policy be valid if I drive in Mexico? You should check with your insurance provider because traffic laws in Mexico are very different from those in Canada and the US. You may require specific Mexican coverage. Will I receive a refund if my policy is cancelled? You will be entitled to a refund of the unused portion of your premium if your auto insurance policy is cancelled before expiration of the time you have paid premiums. Does my insurance company have to advise me why they have cancelled or refused to renew my policy? Yes, all insurance companies must advise their clients of the specific reasons regarding cancellation or non-renewal. Can my insurance company cancel my policy in the middle of a term? Yes, your insurance company can cancel your policy any time as long as they provide you with sufficient notice and a valid reason. Can my insurance company perform a credit check on me? Your insurance company can only perform a credit check if you have signed an authorization form permitting them to do so. What is depreciation? Depreciation is how much the value of your car decreases over time because of wear and tear. Will the amount of depreciation of my vehicle affect my coverage? Yes, your insurance provider will pay you less if you are driving an older car with a lot of mileage that is totaled in an accident. If I am involved in an accident with a driver who has out-of-state insurance, where do I file a claim? You should check with your insurance company and file a claim as if the other party was from your state. What is the minimum number of estimates required by an insurance company? This depends on the company. Some companies require 3 estimates, but others use estimates provided by internal claims adjusters. What should I do if my company adjuster misses some information on my repair estimate? You can challenge the estimate by advising your company adjuster immediately that the damage estimate is incomplete. What is the responsibility of my insurance agent in the claims process? This depends on your particular insurance company. Some agents merely service as a resource to refer to you to a claims representative, whereas others may complete the initial paperwork for your claim. Will I receive a grace period for payment of my premium? Most insurance companies will offer a minimum 15-day grace period to pay your premium before they cancel your policy. |
What is auto insurance? Am I required to purchase auto insurance if I own a vehicle? What is the main reason for requiring auto insurance? Will I be covered by my insurance company if I am sued? What are the main types of auto insurance? What is comprehensive coverage? What is collision coverage? What is liability coverage? How do I know the minimum amount of liability insurance required? What kind of optional coverage can I choose? Am I required to pay a minimum amount of comprehensive or collision coverage? Do I have to purchase auto insurance if I lease a car? What is a premium? What is a deductible? Can my insurance company cancel my auto policy? What should I do if feel my insurance company has cancelled my policy unfairly? What should I do if I don’t receive a satisfactory response about the unfair cancellation of my policy from the consumer affairs division? If I contact my insurance company to verify whether a loss is covered under my policy, can they record this as a claim, even if I don’t receive any money from the insurer? What should I do if I have an accident with an uninsured motorist? What will uninsured motorist coverage cover? Will other people be covered if they drive my car? Why do I have to list all household members, even if they don’t ever drive my car? Which individuals are considered “family members?” Which household members don’t need to be included on my policy? Will I be covered by my auto policy if I rent a car? Will my spouse’s or children’s accident records affect my ability to purchase car insurance? Can my company refuse to renew my policy if I have too many claims? What happens if I forget to include some information on my driving record? What does actual cash value mean? What does replacement cost coverage mean? What factors affect my auto insurance rates? How do companies determine auto insurance rates? Why are the rates so different for different insurance providers? Will my policy automatically increase after I file a claim? What is considered a high-risk driver? Can my insurance provider cancel my policy if I am a high-risk driver? Will I lose my safe driving discount if I file a claim? Do I have to file a police report if my vehicle is stolen? Do I have to file a state motor vehicle report? Will my insurance provider investigate any cases of potential fraud? What is no-fault insurance? What is medical payments coverage? What is bodily injury liability coverage? What is personal injury protection? What is uninsured/underinsured motorist coverage? How long will my claim take to process? How long will it take to recover my deductible? Will any property stolen from my vehicle be covered in my policy? What should I do if my stolen vehicle is recovered? What should I do if my vehicle is totaled? Who will pay the remainder of my loan if my vehicle is totaled? Who is responsible for any lost wages if I can’t continue working? What happens if I am involved in an accident in another state? Will my policy cover the cost of renting a vehicle while my vehicle is being repaired? How do I know which representative will handle my claim? Can I purchase auto insurance if I have a learner’s permit? Can I purchase auto insurance if I have a foreign or conditional license? How will I know the actual salvage value if my car is totaled? What are the most inexpensive cars to insure? How can I find the insurance records for the previous owner of a car? How much will the cheapest car insurance cost? Will my insurance cover the cost to replace a cloudy and pitted windshield if I purchased complete glass coverage? How does an insurance company define a sports car? What happens to my auto insurance if I am charged with a DUI offence? Does my auto insurance policy have to contain the same name as my car loan? Which states are no-fault states? Can I insure another person’s car? Will my auto insurance cover my relatives who have international driver’s permits? Who is responsible for a mistake on my insurance forms? How can I lower my insurance premiums? What is a declarations page? Why do I have a harder time obtaining auto insurance if drivers in my household have a bad driving record? What will happen to me if I choose to drive without car insurance? What is a high risk driver? What does assigned risk mean? What does an assessable policy mean? Am I eligible for any kind of discount on my insurance policy? Will I be charged more if I choose to pay my premiums on a quarterly or monthly basis? What is split-limit liability car coverage? What is single-limit liability car coverage? Should I bother purchasing collision coverage if I own an older vehicle? If I am involved in an auto accident as a pedestrian, will bodily injury liability still apply? What happens if I am involved in an accident while I’m driving someone else’s car? Will my auto insurance policy cover a rental truck that I use to move my personal property? What is gap insurance? Will my auto insurance policy cover me if I use my car in a car pool? Will my auto insurance policy be valid if I drive in Canada? Will my auto insurance policy be valid if I drive in Mexico? Will I receive a refund if my policy is cancelled? Does my insurance company have to advise me why they have cancelled or refused to renew my policy? Can my insurance company cancel my policy in the middle of a term? Can my insurance company perform a credit check on me? What is depreciation? Will the amount of depreciation of my vehicle affect my coverage? If I am involved in an accident with a driver who has out-of-state insurance, where do I file a claim? What is the minimum number of estimates required by an insurance company? What should I do if my company adjuster misses some information on my repair estimate? What is the responsibility of my insurance agent in the claims process? Will I receive a grace period for payment of my premium? |