Auto Insurance – 10 Things You Need To Know

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A driver’s license and auto insurance are indispensable. Leaving aside the requirement that every state has a Minimum Liability Insurance, being on the road without insurance is illegal. In the event of an accident, paying for expensive medical and maintenance costs out of your own pocket may be more than you can afford. So not only do you have to buy auto insurance, you have to buy enough of it.

But do you know enough about car insurance? Join me and answer the following questions.

What affects car insurance rates?

Factors that affect your rate are the year of your vehicle, manufacturer, body type, model, engine size, credit history, and driving history.

Are the premium rates set by the government?

The government has nothing to do with your car insurance rate. Where you live, your credit score, marital status and driving history are the things that really affect your premium.

Will my credit score affect the premium rate?

Your credit score really matters! Many insurance companies consider your credit score when deciding to add or renew your auto coverage.

Do I need car insurance even if I’ve never been in a traffic accident?

Of course. Some drivers are lucky, they have never had or been involved in an accident. But in the event of an accident, the risk of losing everything is very high, and car insurance is the best protection you can get. The law also requires you to have some form of basic car insurance, and the penalties for not doing so can be pretty severe.

What is no-fault insurance?

No-fault insurance means that your insurance company will process the claim and compensate you for the loss, no matter who is at fault for the collision. And insurance companies on the other side will do the same.

Does my personal car insurance cover my personal and business car use?

If you occasionally use your car for business purposes, such as attending meetings, picking up customers or transporting business equipment, you will likely need to expand your personal car insurance coverage to cover your business purposes. Also, if your employees use their cars while working for you, you’ll need to get a separate non-owner-car insurance policy.

Do I need insurance against theft, storm, hail and deer accident?

Many drivers believe that collision insurance covers not only accidents involving objects, but also accidents involving vandalism, hail, animal accidents and fire.

I’m sorry, but that’s not the case. You need to buy collision insurance and comprehensive insurance to fully protect your vehicle from all of these conditions.

I recently paid an insurance premium. Does that mean my new car is covered?

Not necessarily. Most auto policies require the applicant to notify the insurance company or agent within a specified number of days if a new vehicle is actually required to be insured.

Why do male drivers under 25 pay more for car insurance?

This is largely because people of these ages are more likely to be involved in a car accident.

If I lend my car to a friend and that friend has an accident, will his or her insurance company pay for the damage?

I’m sorry, he/she or his/her insurance company won’t pay. It’s actually your insurance that pays for your friend’s driving accident. Even if you are not present at the time of the accident, your insurance record will still show up, and your premium may go up.

To learn more about auto insurance in Car Insurance- How To Reduced Costs.

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