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Cheap Auto Insurance FAQ

What auto insurance is required in the United States?

Requirements vary from state to state, although most require 3rd party insurance to protect against losses, damages, or injuries caused by vehicles. Coverage against damages to a personal vehicle is often optional and up to an individual’s discretion.

What are the consequences of not having a car insurance policy?

The penalties also vary from state to state and can range from fines, license and/or registration suspension or removal, and even jail sentences in certain states. Clearly, auto insurance is an essential aspect of owning a car.

How can I find cheap car insurance?

The best way to find cheap car insurance is to compare rate quotes from the top insurance companies side by side. Insurance rates change over time so it often makes sense to switch insurers in order to find a better rate so long as both companies have strong financial ratings and good customer service. To avoid having to enter in your information multiple times, drive around, or schedule appointments then use our free quote finder at the top of the page or on our home page. Get started finding cheap car insurance now!

What is the Insurance Information and Enforcement System?

In the past, there have been many cases of deceitful individuals canceling their insurance policies soon after registration but keeping their new license plate, which wasn’t originally noticed by the Department of Motor Vehicles. Since then, the DMV has created the Insurance Information and Enforcement System to make it easier to track individuals who may be using their vehicles without car insurance policies.

What are the different coverage levels of insurance policies?

There are several levels of car insurance. First, insurance may cover the insured individual and/or their family. Next, the policy may cover the insured automobile on the policy. Car insurance also may cover third parties that are involved in accidents with the insured individual.

What is the auto insurance risk selection process?

This process helps insurance providers decide first, whether or not they will insure an individual, and if so, how much premium to charge. There are three main components of the auto insurance risk selection process. First, a driver profile consisting of age, driving record, and location of residence. Next, characteristics of their vehicle, such as age, model, and market value. Lastly, the type of policy coverage desired by the individual is taken into consideration during the risk selection process.

What factors determine the price of my premium?

Some insurance premiums are determined by government regulations. Often, though, premiums are based on statistical data. Factors such as the type of car, coverage preferences, the intended use of the car, and the driving record of the owner all affect the premium rate. For example, smaller two-door coupes often have higher rates than larger sedan type vehicles. Males are frequently charged higher premiums because they tend to be more aggressive drivers involved in more accidents, and usually drive more total miles per year when compared to women. Teens with no driving experience also have higher insurance premiums. However, there are many incentives for young, motivated drivers such as good student or defensive driving programs which help result in lower insurance premiums.

What is a deductible, as related to car insurance?

Just like health or life insurance, car insurance policies often call for the payment of a deductible by the individual. The deductible is sometimes called “excess” and is extra money required to be paid by the individual because it is not covered by the insurance company. The individual must pay the deductible before the insurance company will give benefits to the insured.

What is considered to be an “accident”?

An accident includes any collisions that are your fault, collisions that are not your fault, and also reported and unreported collisions that you were involved in while driving a car.

What is a “not at fault” accident?

“Not at fault” accidents occur when your vehicle was parked and damaged by another moving vehicle in a collision.

What types of car insurance coverage are available for consumers?
First, liability insurance calls for a specific dollar amount of coverage to be paid for damages in the event of an accident. Liability coverage can be a split limit or combined single limit. In the case of a split limit plan, bodily injury and property damages are divided into two different parts. A combined single limit plan covers both bodily injury and property damages into one combined limit. Collision coverage, an optional plan, provides protection to an individual’s car when involved in an accident. Comprehensive coverage, also optional, protects an individual’s vehicle from other things such as theft, weather incidents, vandalism, etc. Damages from collisions with animals are also covered under comprehensive plans.

What is an excess payment?

This is a payment made directly to an auto repair shop in the event that your car is damaged in an accident and is repaired through your auto insurance policy.

What is compulsory excess?

Compulsory excess is the minimal payment the insurance company accepts on your policy. These excess payments vary from individual to individual depending on personal driving records and insurance policies.

What is voluntary excess?

This is the extra amount in addition to the compulsory excess that you as an insurance consumer offer to pay, which reduces your insurance company’s financial risk and allows them to charge you a lower premium.

Am I covered if I am involved in a collision in a rental car?

Liability coverage usually also covers rental cars. Comprehensive policies also usually cover rental cars as well, although it should be double checked. If you aren’t covered by your individual car insurance plan, many rental car companies offer the option to purchase additional insurance on the rental car in case of damage to the vehicle.

What is a Collision Damage Waiver?

A Collision Damage Waiver (CDW) is the optional insurance provided by rental car companies for customers whose own car insurance policies do not cover car rentals. Individuals who don’t have rental cars coverage with their normal car insurance policy may be surprised to find out that the credit card they pay with to rent the car may provide them with some coverage. For example, Visa covers vehicle theft and collisions; MasterCard covers theft collisions, vandalism and weather-related incidents; while Discover covers collision damages. Individuals should check with their credit card provider to see if this type of coverage is available to them.

Will I still be covered if a collision was caused by alcohol-related factors?

The insurance industry follows alcohol exclusion laws, which were established in the 1940’s to discourage drinking and driving and to help insurance companies save money on insurance claims due to alcohol-related factors. These laws allow insurance companies to reject claims related to alcohol consumption.

Does my car insurance policy pay for me if I need to be towed?

Many insurance providers offer plans with Roadside Assistance. Some companies will only pay for a portion of the towing cost if the vehicle is covered under the plan and involved in an accident. Many companies, however, are extending coverage and paying for individuals whose cars break down or run out of gas by way of Car Towing policy coverage.

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