Auto Insurance FAQS
1. Can you get auto insurance with just a learner’s permit ?
Yes, you can. A drivers or learners permit is permission to drive and therefore requires the adequate insurance coverage. In many states, the parents of teenage drivers have to show proof that the car that they will practice driving on is adequately insured before receiving their learner’s permit. If you are younger than 18, you will need to check with your auto insurance provider if they will insure your car in your name. The other options you have are: getting insured through your parents’ auto insurance policy, or getting insured through a blanket family auto insurance policy.
2. Do you need auto insurance when you have a learner’s permit ?
Yes, all drivers in the U.S. are required to carry proof of financial responsibility while driving a car. The best way of achieving this is by insuring the car you drive. Each state in the U.S. sets minimum car insurance coverage limits, and all drivers must ensure that they have insurance policies that met these requirements.
3. Can you insure the property of another person ?
Yes, you can insure the property of another person. You need to be authorized by the owner to do so. People who borrow your car occasionally may be covered by your insurance policy, but it is better to check with your insurance provider if this situation is within your policy limits. Coverage depends on your provider and the type of your insurance policy.
4. Will a speeding ticket from another state affect your auto insurance ?
If your insurance company checks your driving record in other states, then a speeding ticket from other states will affect your auto insurance. All states are now to comply with federal regulation that requires driver records to be made available to the other states. Tickets are reported to your state only if you fail to take of them, but all insurance companies have access to your driving records in all states.
5. How do you find insurance records from a previous owner of a car ?
There is no single agency that can help you find the insurance records of the previous owner of a car. It is easier if you’re buying the car from the previous owner, because you can ask him directly about these records. But if you are buying the car from a dealer, you might have to visit the local Department of Motor Vehicles (DMV). The DMV coordinates with insurance companies in some states, which should make your task easier. If you cannot retrieve this information from the DMV, your next option is to contact the Department of Insurance. You could even contact the insurance company directly, or try to get in touch with the previous owner directly. The most convenient (though also the most expensive) option is to pay professional information agencies like CARFAX to find out this information for you.
6. How much does the cheapest car insurance cost ?
The cheapest insurance you can buy is the policy that covers the bare minimum coverage required by law. In most states, this is liability insurance. The cheapest insurance is $19 a month, which is liability only insurance. However, it makes more sense to purchase a comprehensive insurance package to insure your car.
7. Are you covered by a family member's insurance when driving their car ?
The rules for this situation vary from state to state. If you are a listed, scheduled driver on the insurance policy, you will be covered by his or her insurance. For household relatives and regular users of your car, it is essential that they are listed on your insurance policy. Coverage may extend to an unexpected driver (anyone who borrows your car for a short period), but it is best to check with your insurance provider.
8. What is no-fault insurance ?
An insurance coverage is of the ‘no-fault’ variety when the policyholder can claim damages from their own insurance company, irrespective of whether he or she was at fault in the collision. No fault coverage is particularly helpful when the driver of the other car involved in the collision is uninsured, or refuses to pay.
In the US, the following states have ‘no-fault’ laws: District of Columbia, Florida, Michigan, Hawaii, Kentucky, Minnesota, Kansas, New Jersey, New York, North Dakota, Pennsylvania, and Utah. The ‘no fault’ clause may be referred to as the ‘personal injury protection’ clause in insurance policies.
9. Does a ‘no-fault collision’ affect my rates ?
When you file a claim under your ‘no-fault’ insurance policy and your insurance company reimburses you, it does not necessarily mean that your insurer has let you off the hook. Depending on who was at fault in the collision, the insurance company will not pay the deductible, and your future insurance rates may increase.
10. Will a speeding ticket affect my insurance rates ?
It depends on several factors, the most important ones being the policy followed by your insurance provider, and the intensity of the violation. A clean driving record will definitely help keep your insurance premiums low, but minor violations may also be overlooked by your insurance provider. Reckless driving and many speeding tickets may spike up your insurance premiums. It is wise to check the policies your insurance provider follows while purchasing your insurance to figure out how your record will affect your premiums.
11. What is an “act of God” ?
An ‘act of God’ is an event that cannot been foreseen or prevented by any rational human being, such as earthquakes, tsunamis, floods, etc. All natural disasters are known as ‘acts of God’ in the insurance world. Damage caused to your vehicles by such unforeseen events is typically insured under comprehensive car insurance policies. Such events may or may not be covered under your policy, and so it is better to check the limits of your policy with your insurance provider.
12. Is my car insured against floods ?
Floods are natural disasters considered as ‘acts of God’ in the insurance world. Divine deluges might render your car unusable until you invest a considerable amount to repair it. If your car is insured under a comprehensive insurance policy, the insurance may cover the cost of repairs.
13.When will I get my settlement ?
It depends on several factors: whether or not you were at fault in the accident, whether the other party in the accident is insured or not, how long you take to file the claim. It is recommended that you file the claim as soon as possible. There are a few procedural steps the insurance company has to follow before you get your claim. The first step is the inspection of the damaged vehicle, after which your insurance company will compare the estimated cost of repairs with the value of the car. The insurance company then subtracts your deductible, repair costs, and other covered costs before arriving at your final settlement amount. If you are not at fault in the accident, the claim is likely to be processed faster than if you are at fault. Claims involving hit-and-run accidents, or where the other party is not insured, will take longer.
14. When should I file my claim ?
It is best to file your claim as soon as possible. Insurance laws favor those who do not procrastinate in this situation. Unless you file your claim within a reasonable time from the incident, your insurance company will not be obligated to entertain your claim.
15.What happens if my car is totaled ?
After an accident, your insurance company will send an adjuster to inspect the car to either pronounce it dead or deem it salvageable. If your car is totaled (provided you have comprehensive coverage), and you wish to keep it, you will have to check the salvage laws of your state before making adequate repairs to it. The salvage value of the car will be deducted from your insurance payout. If you do not wish to keep it, you will be paid the market value of the car, minus the deductible. If you wish to keep your car after an accident that has rendered your car almost unusable, you must report the condition of the car to the state’s department of motor vehicles. This rule is meant to protect prospective buyers from buying a car that they were not aware was recently damaged in an accident.
16. How do I file a car insurance claim ?
It is best to report any accidents to your insurer as soon as possible. Filing car insurance claims is just a phone call away, as most insurance provider have toll-free numbers and customer service representatives for you to contact. Most insurers also allow you to file your claim online by logging into their websites.
17. Why Do I Need Uninsured Motorist Coverage ?
New York, Maryland, and Illinois have made it mandatory for carriers to provide insured motorist coverage. This type of coverage protects you against financial losses that may arise from being in a collision in which the other party is either uninsured or underinsured. If the other party is at fault, but is not insured, when you are adequately insured but do not have uninsured motorist coverage, you may not receive a penny. To protect yourself from such a situation, you need uninsured motorist coverage.
18. What is GAP insurance ?
‘Guaranteed Auto/Asset Protection’, commonly known as ‘GAP insurance, is aimed at covering the difference between the actual value of the car and what is still owed. You need this type of insurance when your car is stolen or damaged beyond repair. When you are leasing a car, GAP insurance is an essential investment. Many lenders insist on GAP insurance. You can purchase GAP insurance any time, either from the vehicle manufacturers or from insurance companies. Insurance companies prove to be more affordable than vehicle manufacturers.
19.What is comprehensive auto insurance coverage ?
Comprehensive auto insurance is much broader than liability coverage, and covers several perils such as floods, hurricanes, damaged windshields, and animal damage. The maximum amount paid by comprehensive coverage is the actual cash value of the car (minus the deductible) at the time of the damage. So it is important for you to choose the right comprehensive auto insurance deal to ensure that you are compensated, at least in part, in the event of any damage to your car.
20. Does auto insurance cover theft of personal belongings from my car ?
Theft of personal belongings from the vehicle is typically included under comprehensive coverage, as are floods, earthquakes, fires, theft of the car, riots, and damaged windshields. If you want to insure your car against several foreseeable risks, it is best to purchase a comprehensive insurance policy instead of a liability only policy.
21. Why do insurance companies check credit scores ?
Insurance companies in all states (except Massachusetts, Hawaii, and California) check your credit scores before arriving at the figures you will pay as premium. This is because they think that it ultimately reflects the person’s history of getting into accidents and filing claims. If the possibility of you filing claims is higher and this is evident from your credit score (which is used by insurers to calculate an ‘insurance score’) it is likely that you will be charged a higher premium. This is because your insurer thinks that you are ‘high risk’.
22. Why are insurance rates higher for men than they are for women ?
When all other factors are equal, women pay less for auto insurance than men. This is because statistics show that women take fewer risks while driving, and file fewer auto insurance claims than men. So, eventually insurance companies end up spending less on women and paying less premium to women than to men. Insurance companies, thus, decide to charge men higher premiums.
23. Will my insurance rates change if I am leasing instead of buying ?
While leasing a car is an exciting option due lower monthly payments, you might require GAP insurance to cover the risk of it getting stolen or totaled. If you lease your car it is likely that you have paid a small percentage of the actual value of the car, and in the event of any damage to the car you might have to shell out a huge amount to make up for the damage to the car. This is why leasing a car comes with the added expense of GAP insurance.
24. Can I drive my car without auto insurance ?
Most states require you to purchase liability insurance before you can drive legally. It is not optional, but is required by law. Liability coverage will provide you and the other party with financial aid if you are at fault in the accident. The amount you receive will be limited by your coverage limit. However, in Virginia, Mississippi and New Hampshire, you can opt to post cash bonds instead of buying auto insurance.
25. What is a deductible ?
In insurance terms, a deductible is the amount that you need to take care of on your end before filing a claim. Only after you pay the deductible will your insurer pay you any of the expenses due to you. Since this amount is subtracted from the final amount you receive from your insurance company, it needs to be significantly lower than the amount you receive from your insurance company for the policy to make financial sense.
26. How are insurance carriers rated ?
Insurance carriers are rated on factors such as the speed of processing claims, financial strength, trustworthiness, customer service, and the coverage options they provide. Better Business Bureau, Standard and Poor’s, A.M. Best Company, and Fitch Ratings are rating agencies that can provide you with the information you need to make an informed choice between insurance carriers. It is best to check the ratings provided by these agencies before choosing the right coverage for your individual needs.
27. Why are auto insurance rates higher for young drivers ?
One of the factors that determine your auto insurance premium is your age. This is because the statistics reflect that young drivers are more prone to accidents and filing claims. A possible reason for this is that young drivers, or those who have recently learnt to drive, are far more likely to make mistakes while driving owing to their inexperience.
28. Should my teen be added to my policy or should I purchase a separate one for him or her ?
If your teen lives with you, it may be preferable to add him or her to your policy. This could make you eligible for discounts from your insurance carrier. Check with your insurance company if this is the cheaper and wiser option for you. But if your teen is attending college in another state, he or she may need a separate policy.