Auto Insurance Frequently Asked Questions

Question: I'm I obliged to carry auto insurance coverage?

Answer: Yes, auto insurance coverage is mandatory. Not meeting state requirements on auto insurance will result in fines, license suspension or jail time, according to local state legislation.

Question: How much insurance coverage should I carry?

Answer: Each state has specific requirements on auto insurance coverage that deal with the amount of liability coverage carried with your policy. There are numerous sources which you can consult with regard to your local minimum requirements. Try using the Internet, asking your insurance agent or addressing your state insurance department. All other types of insurance coverage besides bodily injury and property damage are optional. However, if you're using an auto loan to finance the purchase of your car, there may be additional requirements concerning the type and amount of insurance you should carry.

Question: Will an accident or a traffic ticket affect my premiums?

Answer: Most certainly, yes. Each traffic accident or violation will reflect in your drivers record. This document is one of the main factors influencing your rates, and the more entries you have the higher of a risk you are regarded, and your rates will be adjusted accordingly. Your premiums may remain the same only if it is your first accident and it's minor.

Question: Does it matter where I live?

Answer: Of course it does. Living in different parts of the same state will give you quite different rates. Urban areas are known for heavy traffic, frequent accidents and high theft rates, that's why it usually costs more to have auto insurance in a metropolitan area than in smaller towns or rural regions of the same state.

Question: How to get lower rates for my teen?

Answer: First of all, be prepared for paying higher premiums for your teen, since young drivers are the most costly age group according to auto insurance companies. If your teen is a good student with an average of B and higher, you can opt for a special discount. You can also include your teen into your policy, rather than buying a separate one, especially if you're driving the same car.

Question: Which cars are more expensive to insure?

Answer: Cars that are costly to repair, with high theft rates, high engine power and low safety features are usually charged with higher rates. This applies to luxury cars, performance and sports vehicles, convertibles and SUV's.

Question: What happens if I have an accident with an uninsured driver?

Answer: There are two possibilities. If your policy does not carry uninsured motorist coverage and the other party is at fault, you won't get your damage or injuries covered since the other party doesn't have money for it. If your policy includes uninsured motorist coverage, you will be reimbursed the expenses as if it were the other party's insurance company paying you.

Question: Does the color of my car affect my insurance rates?

Answer: This is one of the most ridiculous insurance myths that many drivers still tend to believe. The color in which your car is painted doesn't affect your rates to any extent. What really affects your premiums is the engine volume, top speed, safety, anti-theft features, and other factors that help asses the actual risk of the particular car make and model. And the color of the car has nothing to do with its actual performance and safety.