Car Insurance FAQ

Whether you are new to car insurance or already experienced the hardest period as an auto owner, questions always appear and disturb your enjoyment. Here we provide you with some of the most important FAQ on car insurance.

What Does Auto Insurance Cover?
There are several categories of auto insurance, each of which covers a different aspect of your risk as a driver. Here is a brief overview of these types of coverage:

  • Liability
  • Collision
  • Comprehensive
  • Medical Expenses
  • Uninsured/Underinsured
  • Roadside Assistance
  • Rental Reimbursement

How Does Car Insurance Work?

Car insurance helps you to recover from damage, injuries and expenses related to a collision or other incident. It is not designed for you to come out ahead financially, but it is designed to keep you from suffering major financial hardship due to an accident, whether it’s your fault or not.

Car insurance is about risk transfer. If you don’t have insurance, the financial risk is on you in the event of an accident. Buying auto insurance mitigates some of that risk. For the cost of your premium, the insurance company will take on much of that risk for you.

 

How Do I Get Car Insurance?
There are a number of ways to get car insurance. It is important to understand that there are well-established insurance companies that offer excellent car insurance coverage, and there are companies that were built solely to sell car insurance and make money. Some auto insurance companies gain customers through advertising and others through word-of-mouth and excellent service.

When you buy insurance through an independent agent, you can eliminate confusion and find the best policy for your budget and insurance needs. Independent insurance agents do not sell policies for one company; they shop from many different companies to find you the best rates and coverage for your situation. No matter where in the U.S. you are located, there is a local Trusted Choice member agent near you who can get the answers you need about auto insurance before you buy.

How Expensive Is Car Insurance?

Your vehicle just might be the most expensive possession you have other than your home. However, your auto insurance won’t necessarily be costly.

While rates vary from state to state and take into account a variety of factors, car insurance is usually fairly affordable. The factors that affect your costs include whether your car is new or used, the overall safety rating of the car, your driving record, your age and gender, and even your ZIP code, as certain areas tend to have a higher occurrence of accidents and claims than others.

The discounts you may qualify for include:

  • Good student discount: May apply if the young driver in your family has good grades
  • Good driver discount: May apply if you’ve been accident-free for a period of time
  • Multi-car discount: May apply if you insure more than one of your vehicles with the same company
  • Multi-policy discount: May apply when you insure both your home and car with the same company
  • Your local agent can also talk with you about these discounts and determine the ones that would benefit you and save you the most money on your policy.

Can Auto Insurance Companies Drop You?
Auto insurance is a contract, and as with many contracts, it can be canceled or voided by either party. You can drop the contract by changing to another company; the following are circumstances in which an insurance company can drop you:

  • If you fail to pay your premiums
  • If you present fraudulent information on your application for coverage
  • If your license is suspended or revoked for any reason, such as too many accidents, or driving under the influence

 

Some states allow companies to drop coverage for other reasons; to learn about the laws in your state, contact a local independent agent in the Trusted Choice network in your area.

Do Auto Insurance Quotes Affect Credit?
Car insurance is not an application for credit, so while insurance companies check your credit to determine your responsibility and financial security, they are not extending credit. A credit check for a car insurance quote is called a “soft pull” and it does not affect your credit rating.

Credit scores have become very important in recent years as lenders have tightened restrictions. Many families are focused on eliminating debt and getting caught up on payments so they can improve their credit scores and get better rates when getting a mortgage or a car loan. Every time you fill out an application for credit, your credit score can be affected because a good percentage of your score is based on how much total credit you have and the number of accounts you have.

 

Does Auto Insurance Cover Rental Cars?
This is a common question. If you make sure you have your own vehicle covered, do you need to get the special coverage offered at the rental counter if you go on vacation and get a rental car?
You will have to double-check your particular policy, but most policies do provide the same coverage for a rental car that you have for your personal vehicle, unless the rental is being used for business purposes. It’s always a good idea to check your policy. If you are seeking a new policy, an independent agent in the Trusted Choice network can help you find one that does cover rentals.

Does Auto Insurance Cover Theft?
If your car is stolen, a number of things need to happen for you to be compensated for your loss. First, you will need to file a police report and wait while there is an attempt at recovery. If your car is not recovered, you can file a claim with your insurance company if you have comprehensive coverage.

Because of the risk insurance companies face with fraudulent claims, you will need to complete some paperwork to file your claim. But providing you have documentation for the stolen vehicle, your insurance will compensate you for the value of the vehicle up to the limit of your comprehensive coverage.

Can I Get Car Insurance with a Suspended License?
Most insurance companies will not issue or maintain insurance for someone who has a suspended or revoked driver’s license. If you need to get from home to work while your license is suspended, you are not out of luck.

You can work with your local DMV to get a hardship license, or you can file an SR 22 form through your insurance agent who can file that with the DMV. If you are allowed behind the wheel due to a hardship license and/or an SR 22 form (which guarantees insurance coverage for a period of time), then you will be able to get car insurance.

 

 

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