Auto Insurance Frequently Asked Questions
Auto insurance isn’t only great protection for your vehicle, it’s also the law. All states require some degree of insurance for your vehicle to protect you and other motorists. Coverage requirements will vary based on your financial responsibility for your car and your state’s requirements. Some states even require you to have liability insurance before you even get a license.
What factors affect my car insurance rate?
Your age, where you live, the kind of car you drive, and your driving history all work together to help determine your auto insurance rate (also called your premium, or more simply your price).
That said, when it comes to your car insurance rate not everything is in your control. An increase in distracted driving incidents, higher medical and/or auto repair costs, and more drivers on the road can all contribute to generally higher rates.
What car insurance discounts offer?
Safe drivers specifically can save the most: Accident-free drivers, those that take an accident prevention course, and vehicles with specific safety features included may all be eligible for a discount.
Why purchase auto insurance with an agent?
Insurance agents like John Perry Insurance agents provide customers with expert advice that ensures you have the most appropriate coverage for you and your vehicle.
Beyond the point of purchase, agents are also an excellent advocate to have if and when you file a claim. They’ll help you understand the claims process, including when and how to file while providing peace of mind knowing that you have an insurance professional in your corner.
Should I buy comprehensive coverage if I have an older car?
Let’s start with the fact that you’ve got an old car. Remember, the maximum payout for comprehensive coverage tends to be the cash value of your vehicle.
So let’s pretend your car is totaled in a flood. How would your maximum payout compare with the monthly premiums you would be paying if you had comprehensive coverage?
When the overall cost of your premiums starts to outweigh the cost of your car, you might want to save your money for something else.
Some experts suggest dropping comprehensive when the premium costs 10% or more of the potential payout. For example, if your car costs $4,500 and if your premium runs more than $450 per month, it may be time to stop investing in comprehensive coverage.
However, it’s important to understand that dropping comprehensive coverage means you are responsible for the FULL cost of vehicle repairs or replacement in case of an accident. So make sure you are prepared to pay out-of-pocket in case of an incident.
What is liability coverage and how much should I have?
Nearly every state requires a minimum amount of liability coverage as part of your auto insurance policy. Liability coverage has two components: Bodily Injury Coverage and Property Damage Coverage.
Bodily Injury Coverage
This coverage protects you in the event that you:
- Injure a pedestrian, a driver, or a passenger
- Cause a fatality with your car
This coverage helps pay you for:
- Medical Expenses – This helps cover any emergency services, hospital care, follow-up visits to the doctor, crutches, etc.
- Funeral Costs – In case of a fatality, this would help cover the cost of the funeral.
- Lost Income – Say you seriously injure a person who works in construction. Because of the accident, that person may not be able to physically perform at his job for several months. Bodily injury coverage would help compensate the man for his lost wages during those months.
- Legal Fees – If an injured party sues you as a result of an accident, bodily injury liability would help cover the cost of your legal counsel.
What should I do before buying or leasing a new car?
There are three main things to consider before buying or leasing a new car that is relate to your auto insurance policy:
- New Insurance Requirements – If you are leasing or financing your vehicle, lending companies will often require you to purchase comprehensive coverage and collision coverage. Make sure you have the appropriate insurance for your vehicle.
- Safety Features – Choosing a vehicle with safety features and anti-theft devices can help lower auto insurance rates.
- Vehicle Type – Before buying, remember that some vehicles cost more to insure than other vehicles. It pays to get a rate quote before getting the vehicle you are hoping to buy.
How can I get the best auto insurance price possible?
If you are looking for ways to get the best possible price for auto insurance, here are a few tips for lowering your monthly premiums:
- Raise your deductibles. This will lower your auto insurance premium. However, it means you will pay more out-of-pocket expenses given there is an accident.
- Lower your coverage limits. This will lower your auto insurance premium as well. However, it may cost you more in the case of an accident. Here’s how: Your coverage limit refers to the maximum the insurance company will pay in a given situation. Anything exceeding this cap would be your financial responsibility. If there is an expensive accident, a lower coverage limit means you are likelier to pay on your own.
- Improve your vehicle safety. Look for features that reduce your risks like airbags, anti-lock brakes, anti-theft devices, and off-street parking.
- Drive Safely. Those with no traffic violations, accidents, or other incidents benefit from lower rates.
- Bundle your insurance. Look for opportunities to combine multiple types of insurance, like homeowners and auto insurance for reduced rates.
- Be responsible with your credit Those with good credit are considered a better risk, and that means a better price for auto insurance, in states where insurance scores are used by insurance companies.
For a great rate, get a quote online. It’s free and it’s fast!