Frequently Asked Questions

Auto Insurance

It is generally agreed among insurance professionals that the state minimum policy limits are not enough. In many cases limits of "100/300/100" are appropriate; in others "250/500/250" may make more sense. This means:
  • $100,000 ($250,000) per person for bodily injury
  • $300,000 ($500,000) per accident for bodily injury
  • $100,000 ($250,000) per accident for property damage

The limits most appropriate for you will depend on a number of factors. Since in most areas medical treatment runs within a certain cost range, the limit for covering property damage is the one you may want to take into account.

If you live in an area where you feel that even a common accident, that was your fault, would generate property damage of more than $100,000, you may want to consider higher limits. Remember, property damage is the value of the other person's car plus any other property damaged during the accident if you are at fault.

Collision coverage is when you have a collision with something like another car. Comprehensive coverage is when it is anything else other than a collision. Such as damage from road debris, fire or theft. Most people would have both coverages when using the car on a regular basis. Sometimes when one is just storing a car, they may only keep comprehensive coverage since they are not using it on the road therefore, it is unlikely to be in a collision.
In most cases, yes, as long as they have the permission or reasonable belief from the insured that they can use the vehicle. The insured is the person named on the insurance policy and their spouse if applicable.

There are some exclusions, so you would need to look at your particular insurance policy to make sure. Remember, everyone in your household must be listed on your insurance policy if they have a license. For example, if a girlfriend you live with uses your car, she may not be covered if you did not list her on your insurance policy. On the other hand, if you live separately, she could use your car with your permission and be covered.

The premium you pay is a direct reflection of your driving record for the past three to five years depending on the insurance company. Insurance companies order driving records from the DMV of your residence state and from other states where you've been licensed. Statistics show that drivers with tickets and accidents are more likely to have additional accidents than drivers with clean records.
Many companies will not insure you if you live with a relative who has a poor driving record. If your teenager has a poor driving record, you may have trouble getting a preferred rate because he or she is defined as an "insured" under your policy.

Some companies will exclude this person by name from the insurance policy. Many companies will not insure anyone in the family unless every driver in the household meets their requirements.

Most auto insurance policies pay the actual cash value (ACV) of a vehicle totaled in an accident. The ACV is equal to the market value of an auto immediately before the accident.

Insurers must use a fair and reasonable method to determine the value of your car. If you have concerns about their decision you may be able to negotiate with your insurer by telling them why your car may have had more value than what the insurance company originally determined.

Sometimes the value of a car is less than the balance on your car loan. There can be several reasons for this. Interest rate changes may have increased the amount of your loan. Rebates may not have been applied to the purchase price, or poor maintenance of the auto may have reduced its value. The insurance company bases its payments on the actual cash value (ACV) of the car, not the amount of your loan. In some states you may be able to purchase a special type of insurance, known as guaranteed auto protection (GAP), when you buy a car. GAP insurance covers the difference between the ACV and your loan balance.
In most cases, yes. Automobile insurance policies require every licensed person in your household to be listed on your insurance policy unless they have a completely separate policy of their own. This includes a teenager who just received their license or a college student who still uses your address as their residence and/or visits regularly on weekends, vacations, etc.
It is hard to think clearly after a car accident, so it is important to know before you get into an accident what to do first and what questions may need to be answered. This checklist will help you know what to do after a car accident. It is best to review it now and then print a copy to keep in your car.
  1. Determine the Extent of Damage or Injuries. Try to stay calm. Panic can make others panic and the situation worse. There needs to be a calm person to determine the extent of damage and to determine if there are any injuries that need immediate medical attention.
  2. File a Car Accident Report with the Police. Even in a minor accident it is important to make sure there is a legal accident report. Do not leave the scene until the police file a full report.
  3. Discuss the Car Accident Only with the Police. With everyone all shook up it can be hard not to talk about what just happened, but that can also lead to you not thinking clearly and accurately about what happened. It is important to limit your discussion of the accident and not to admit any fault or liability. You should talk about the accident with the police and your insurance agent only.
  4. Get the Facts. This is the part most people know to do, but often forget after the accident for one reason or another. It is important to get names, address, and phone numbers of everyone involved in the accident. A description of the car and license plate number can also be helpful, but make sure you also get their insurance company and the vehicle identification number of their car. Don't just assume the license plate number will do because most insurance companies only record the type of car and the vehicle identification number, not the license plate number.
  5. Call Your Insurance Agent. Call your agent or insurance company's 800-number immediately, even at the scene with the police if possible. Sometimes the police officer can give your insurance company more accurate information rather than information you may not be recording properly because you are upset by the accident. This can save you a lot of time later.

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