Frequently Asked Auto Insurance Questions

Usually policyholders like to get good value for their money while getting insured properly. Here are frequently asked car insurance questions and their answers. We mainly covered purchase and coverage questions on this post. We have a few posts on this website dedicated to answering other questions and you can find them by using the search box on the top or checking FAQ category.

What are the Things to Consider when Purchasing Auto Insurance?

Buying car insurance is a process requiring some thoughts. You want to make sure that you get value for your money and at the same time get insured properly. Here are a few points you should consider in the process.

1.    As well as the price, try to get as much coverage as you can for the same money. Also, think what is important for you in a policy and try to achieve it. For example, is it claim handling you care more or you want a particular coverage included.

2.    Buy a good level of auto insurance liability coverage, not just the minimum legally required. The cost is not really going to be much different. Get quotes for various levels of coverage, if you don’t believe us.

3.    Next step is to look into optional coverage. This part is mostly about protecting your investments on the cars owned. Also, you could buy Personal Injury Protection for yourself and your family if this is not already included in your state minimum car insurance. Don’t forget Uninsured Motorist Coverage as well.

4.    Lastly, you probably have preference as to what type of a company you would want to be insured by. Maybe you prefer smaller or bigger companies, mutual or stock companies. It is time to make a choice in the light of price and coverage on offer.

You can find further information on how to shop for cheaper car insurance in that post.

How to Lower Auto Insurance Premiums?

There are a few discounts that may be applicable to you. The obvious ones are good driver and no claim discounts. You can get as much as 40% savings if you haven’t had any accidents and traffic tickets in the last three years. Your zip code, age, gender, marital statues and credit rating will be very influential on the premiums. You can also save money on vehicle insurance with defensive driving courses or buying a safer automobile.

You could get savings for insuring all your automobiles under a multi-car policy or combining your home and automobile insurance. One other thing you could do to make your auto policy affordable is to play around with deductibles. If you could get considerable discounts for increasing your deductibles it may be a good option especially if you are a good driver who does not expect accidents or live in a safer neighborhood with little crime.

One way of saving money on car insurance that everyone can use regardless of driving history, cars owned or claim records is to shop around. People report saving hundreds of dollars by shopping around. To do this effectively, you should get several quotes or ask your broker to search for you. This is a simple and effective method and you can do it in a few minutes.

Just remember that you compare oranges with oranges by making sure that you get quoted on the same bases by every company you apply. Also, look if there are special conditions imposed on you for offering cheaper quotes.

Is It Worth Getting Full Coverage on an Old Car?

Insurance is not a sentimental decision. It is a financial product to secure your assets and protect yourself against third party liabilities. If you feel that the losses are acceptable to keep in house you don’t need insurance to cover them. For example, if your car is worth about $4,000 and you have the financial means to cope with such loss you may choose not to insure it.

However, you should get quotes and look at your options before deciding on when to drop collision insurance or any other components. Say, you have two cars, one is brand new and the other one is older. You can probably see that you need to insure the new one but thinking about the old one. Perhaps, you can get a quote to insure the old one under the same policy as the new one. Remember, auto insurers are smart and they can see that you are only keeping the old one as a backup and you can only drive one car at a time. Then, you shouldn’t and wouldn’t pay much to insure the old with the new.

Always look to see if there is a smart way of covering the risks rather than seeing it as a have it or not decision. Again, you can increase the deductibles and save tons of money on your insurance that it does not become a concern for your wallet any more.

Can Someone Drive my Car and Be Covered on my Insurance?

With a standard policy people who occasionally drive your automobile would be covered. Remember that your policy would be the main one to insure liability and physical damages to your car even your friend has own insurance policy. Also, if your friend has an accident it will go down as a claim on your policy. If someone having more than occasional access to your automobile you should consider including them on your policy as a listed driver.

You should always check your policy that you don’t have special conditions on your policy that prevents you from lending your auto. Some policies may only allow driver over the age of 25 to drive the insured vehicle. It is always best to check.

What Is the Difference between Collision and Comprehensive Coverage?

Collision Coverage is defined as losses incurred when your auto collides with another vehicle or object. For example, any traffic accident damages or hitting the mail box with your automobile will be paid under collision coverage.

Comprehensive Coverage provides coverage for most other direct physical damage losses to your vehicle. For example, damage to your car from a hailstorm or a fallen object will be covered under comprehensive coverage.

It is important to know the differences between the collision and comprehensive car insurance coverage for a couple of reasons.

1.    It is good to know the difference in order to make an informed purchasing decision about optional coverage.

2.    The deductible amounts under the collision and comprehensive coverage are often different.

When Do I Need GAP insurance?

Whether the automobile leased or has an outstanding loan, GAP insurance can provide valuable protection during the early years of the vehicle’s life. It is no secret that a new car’s value drops the minute it is driven off the lot. If a bus runs into the side of a new car five minutes after you drive it off the lot, your insurance only covers the actual cash value of it. At this point, there’s a good chance the insurance payoff isn’t enough to pay off your outstanding lease (or loan) balance.

If a loss occurs (theft, total loss in a collision, etc.), GAP insurance will pay the difference between the actual cash value of the car and the current outstanding balance on your loan or lease. Some lenders and lessors actually require GAP coverage until the outstanding loan/lease amount drops below the value of the vehicle or the loan is paid off.

GAP insurance is typically not very expensive, since the coverage amount is relatively small. However, the cost will vary depending on the type and value of the vehicle you purchase.

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