Auto Insurance: Articles and Resources

Yes, auto insurance providers will look at your prior coverage to determine your rate.  If you have a gap in insurance coverage at a certain point in time (even just one day without coverage), auto insurance companies may view you as a risky driver.  Consequently, your auto insurance rate will be higher.

At the very minimum, your auto insurance policy must meet the amount of coverage your state specifies.  For example, California drivers must have 15/30/5 in liability coverage (in thousands of dollars).  Please keep in mind the state’s minimum coverage may not be adequate for your needs.  You may want to increase your coverage depending on your risk tolerance, your vehicle, your assets, and your area.

There are three factors that may dictate the need for insurance: first time car buyer, state of residence and method of payment. Typically first-time car buyers have to purchase some kind of insurance because they are presumed to not have any preexisting automobile insurance. Certain states also require car buyers to have insurance before driving the car off the dealer's lot. Buyers financing their vehicles through particular lenders may also need to have the vehicle insured in order to protect their interest.

Driving without proof of auto insurance or financial responsibility will result in fines and penalties and possibly a loss of driving privileges.   If you are involved in an accident, you will be financially responsible for any damages or injuries that you caused.

First off, evaluate your commitments in order to determine the proper liability limits. Doing so may protect your assets in case of a lawsuit thereby insulating your family and/or business from potential harm. The second consideration pertains to whether or not you mind paying higher deductibles, if you do not then you may be able to lower your premiums. You also may want to look into the optional areas of coverage in certain plans in order to maximize your protection. Lastly, before choosing a company, consider value. Companies that have greater financial security but are a bit more expensive may prove to be more valuable in the long run.

Under most auto insurance policies, you, your family members, and any friends or acquaintances who drive your car will be covered.  Explicit permission to drive your car is not required as long as there is reasonable belief that you allowed them to use the car.

Auto insurance providers look at various statistics on a particular vehicle’s likelihood of being in an accident, being stolen, or being vandalized.  The more likely a vehicle is to be stolen or be involved in an accident, the more it will cost to insure the vehicle.  Additionally, vehicles that are more costly to repair will also cost more to insure.

Having a speeding ticket or traffic violation on your driving record will likely increase your premium as insurance companies will view you as a riskier driver to insure.  On average, auto insurance rates will decline 3 years after your traffic violation.  Avoid traffic violations by driving safely.  If you do receive a ticket, consider taking traffic school to remove it from your record or contest it in court.

Being involved in an accident will likely increase your insurance premium.  The amount of increase will depend on the type of accident, whether you are at fault, and the severity of the accident.   You may also become ineligible for certain discounts such as the good driver discount.

A means of insuring your vehicle against various losses. Consumers dictate the extent and nature of their coverage by choosing among options  they are presented by their insurance company.

Protects you from financial losses in the event of a lawsuit claiming for damages for any injury or death done to another person.

A means of protecting your auto from damage stemming from an accident between the insured and another vehicle and/or object.

Covers damages to your car that are not considered as a vehicle collision such as damages from auto theft, falling objects, fire, storms, floods, earthquakes, and a collision with an animal.

The amount of money you will pay towards any accident related repairs or bills before your insurance coverage comes into effect.

A service offered by insurance companies that typically include towing, flat tire replacement, jumpstart service, and lockout service.
 

Insurance coverage that protects you from financial losses due to damages you caused to another person or property.  Liability coverage has two components: Bodily injury and property damage.

An optional insurance coverage option that pays for medical expenses for you and your passengers regardless of fault.

(1) limits the amount of damages obtainable through suing another party due to negligence and in its stead they are offered broader first party benefits; (2) a type of insurance wherein the provider pays for the policy holder's losses regardless of culpability.

Protects you from financial losses in the event of a lawsuit claiming for damages done to other person’s property.  This can include any damages to a fence, structural damages, or vehicle damages.

An optional coverage that covers the cost for securing alternative transportation such as rental car, taxi, bus, etc.

Things or conditions that increases the likelihood of an accident.  This can include rain, potholes, fog, animals, snow and ice, or road debris.

Coverage that pays for any remaining cost for auto repairs, medical bills, lost wages when the at-fault motorist’s insurance policy cannot cover all the expenses.

Coverage that pays for injuries and damages to your car, property, or yourself if you are involved in a hit and run accident or an accident with an uninsured driver.