Enter your ZIP code:

Car Insurance: Your Questions Answered

Though going without it really isn't an option, car insurance isn't always the easiest subject to understand. To interpret your options and get the best deal, you need a basic understanding of how it functions and what to expect from your auto insurance company.

Since education is your best defense when it comes to buying auto insurance, InsureMe would like to answer some common questions on the topic. We hope you find this information useful as you search for the right car insurance policy.

FAQs

Why do I need auto insurance?

You need auto insurance for a variety of reasons. First, though each state determines its own coverage requirements, drivers in every state must carry proof of some type of auto insurance in order to drive. Second, auto insurance protects you from financial and legal obligation when you're involved in an accident. Depending on the situation, the coverage you choose and your state's insurance system, it may cover your expenses, those of the other party—or both.

What kind of coverage is included?

Auto insurance includes three broad coverage categories designed to protect you from loss.

  • Property coverage: Pays for damage to or theft of your car
  • Liability coverage: Covers others against bodily injury or property damage
  • Medical coverage: Pays the cost of treatment, rehabilitation and sometimes lost wages and funeral expenses due to an accident

How can I find out which types of coverage my state requires?

Contact your state department of insurance, or read up on state laws at the Insurance Information Institute. On this page, you'll find comprehensive requirements listed state by state.

What determines my auto insurance rates?

Your premiums are based on how much risk you present to your insurance company; what it costs your insurer to conduct business, and how much money your insurer estimates it will need to pay all claims during the year. To best determine these answers, your insurer examines such factors as your age, the make and model of your car, your driving record, what kind of driving you do most, where you keep and drive your car, and even your credit rating.

Why do insurance rates vary so much from one company to another?

Depending on each insurer's claims history experience and cost of doing business, rates are set independently—and can vary widely. This is why it's so important to get several quotes before deciding on the right policy.

Is there anything I can do to reduce my car insurance rates?

Absolutely! Here are a few strategies you should discuss with your insurance agent:

  • Establish a safe driving record
  • Take advantage of money-saving discounts with credits such as defensive driving, driver training, anti-theft, low mileage, multi-car and long-time renewal
  • Choose a higher deductible and pay more expenses out-of-pocket
  • Drive safer cars
  • Eliminate unnecessary coverage, taking into account your car's age and condition
  • Look for group rates through employer-, credit union- or association-sponsored auto insurance programs
  • Get several quotes and compare policies

Can my insurance company cancel my policy once I buy it?

Yes, but only if you don't pay your premium or your license is suspended while your policy is in effect. However, if either of these happens and your policy is cancelled, you're entitled to at least 30 days notice and a refund of the unused premiums paid, minus the cost of cancellation.

Can other people drive my car and still be covered?

Definitely! Since your auto insurance coverage is attached to your car rather than just to you, anyone who drives your car with your permission should be covered. However, check with your insurance company for more specific details.

Does my policy provide coverage when I rent a car?

Yes, most auto insurers today cover rentals under your standard auto insurance policy. However, if you also purchase insurance from the rental car counter when you go on a trip, that rental policy automatically supersedes your auto insurance policy. So make sure you know for sure what's covered before you purchase any additional, short term coverage.

What should I do if I have an accident?

Get a copy of the police report, take down the other party's insurance information, and call your insurance company right away. Your agent can help you determine whether or not you should file a claim, depending on the situation.

If you have a camera handy, you may also want to take pictures of the vehicles involved for later proof of damages.

If I'm not at fault in an accident, will my premiums rise anyway?

If you have a good driving record with no history of accidents, it's unlikely that your premiums will increase solely due to one incident. However if the opposite is true, your insurance company may assume you're a hazardous driver and increase your rates.

How much do speeding tickets affect my rates?

Although different companies have different practices when it comes to raising rates, many states have laws against raising premiums after just one ticket. So, depending upon state laws and the severity of the violation, your rates may or may not go up with just one ticket.

My teenager just got his license and, when I added him to my insurance, my rates went through the roof! What can I do?

Adding your youngster to your policy was the right thing to do because it protects both him and you in case of an accident. Unfortunately, you should also expect a natural rise in insurance rates until he is older and more experienced at driving. Meanwhile, encourage him to drive defensively, wear his seatbelt, avoid distractions and keep his grades up. These actions can provide worthwhile discounts and help him establish a good driving record which, in turn, helps keep insurance premiums in check.

A lot of people drive uninsured. How can I protect myself?

Uninsured motorist coverage provides the protection you need from those who carry no insurance. With this type of coverage, your insurance company reimburses you for bodily injury, medical expense or death from an accident caused by a driver with no insurance, the driver of a stolen car or a hit-and-run driver. It does not, however, cover damage to your car; you need collision coverage for that.

How do I choose the right insurance company?

Your goal should be to find an insurer with a stable history and a high level of customer satisfaction. Check out their ratings at independent sites like A.M. Best or Moody's Investors Service, or contact your state department of insurance, which can also furnish this information.

List of Articles
No. Subject Author Views
85 Rental Car Insurance: Do You Really Need It? youcomparequotes 17717
84 Auto Insurance: The Secret Weapon for Saving at the Pump youcomparequotes 18041
83 Getting the Cheapest Car Insurance in Your State youcomparequotes 16991
82 Play It Safe for Cheap Truck Insurance Rates youcomparequotes 17535
81 How to Get Discount Auto Insurance youcomparequotes 17794
80 Insurance for Van Lovers youcomparequotes 17539
79 Car Insurance That Fits Your Needs youcomparequotes 17193
78 Online Car Insurance Quotes in 5 Easy Steps youcomparequotes 17380
77 Getting Insured with an Online Auto Insurance Quote youcomparequotes 18398
76 Home and Auto Insurance: Sure-Fire Protection in Unsure Times youcomparequotes 17195
75 How to Keep Teen Car Insurance Quotes at Bay youcomparequotes 19436
74 Choosing Cheap Online Car Insurance That Fits Your Life youcomparequotes 17781
73 Auto Insurance from InsureMe youcomparequotes 17696
72 Car Insurance Comparisons Save You Time & Hassle youcomparequotes 18062
71 Car Insurance Companies & InsureMe Save You Money youcomparequotes 18452
70 Buying and Insuring a New Car youcomparequotes 16814
69 Compare Auto Insurance Rates youcomparequotes 17142
68 Safety Measures Lower Auto Insurance Quotes youcomparequotes 16648
67 Getting Car Insurance Quotes, from Beginning to End youcomparequotes 16741
66 The Car Insurance Quote & Ratings Factors youcomparequotes 17200
65 What's Behind Your Auto Insurance Quotes? youcomparequotes 17310
64 How Cheap Car Insurance Can Save You Money youcomparequotes 16657
63 How to Reduce Car Insurance Prices youcomparequotes 17188
62 Getting Insured with Free Car Insurance Quotes youcomparequotes 17381
61 Auto Owners Insurance & Costly Driving Mistakes youcomparequotes 16697
60 Auto Insurance Cost & Your Ride youcomparequotes 17193
59 How No Fault Auto Insurance Works--or Doesn't youcomparequotes 16969
58 How to Get the Cheapest Car Insurance youcomparequotes 16877
57 Selecting a Car Insurance Company youcomparequotes 17576
56 Finding New Car Insurance Following Cancellation or Nonrenewal youcomparequotes 17185
55 Get the Best Car Insurance Rates Around youcomparequotes 17426
54 Factors That Affect Your Car Insurance Quotes youcomparequotes 16463
53 Child Safety Belts Keep Kids Safe youcomparequotes 17129
52 Speeding and Car Insurance Rates youcomparequotes 16855
51 Not At Fault Car Insurance & Accidents youcomparequotes 16968
50 State Auto Insurance Becoming Available youcomparequotes 17454
49 Auto Insurance Gap Narrowed by Insurance youcomparequotes 17707
48 Car Insurance & Roommates or Family Members youcomparequotes 17280
47 PIP and No-Fault Auto Insurance Reform youcomparequotes 16978
46 PIP and No-Fault Auto Insurance Reform youcomparequotes 16882
45 SUVs: Minor Collision, Major Damage youcomparequotes 17433
44 Severe Weather Driving Tips youcomparequotes 17210
43 Avoiding Aggressive Drivers youcomparequotes 18072
42 Safety Tips & Car Insurance for Teens youcomparequotes 17126
41 Insurance for Cars: It's Your Choice youcomparequotes 17083
40 Car Insurance Quotes Save You Money youcomparequotes 17145
39 Finding & Comparing Auto Insurance Specialists youcomparequotes 18020
38 Safety Features Save Lives & Money youcomparequotes 16906
37 Curbing Auto Insurance Prices youcomparequotes 16447
36 Teen Auto Insurance youcomparequotes 16731
» Car Insurance: Your Questions Answered youcomparequotes 16783
34 How to Buy Car Insurance youcomparequotes 17419
33 Vehicle Insurance: Covering Any Kind of Car youcomparequotes 16698
32 Truck Insurance for Your Pride & Joy youcomparequotes 16486
31 How Insuring a Used Car Can Save You Money youcomparequotes 17514
30 All-in-One Policies Insure Car & Home Together youcomparequotes 17336
29 Credit Scores & Car Insurance youcomparequotes 17927
28 Classic Car Insurance Protects Your Relic Ride youcomparequotes 16882
27 Reducing SUV Insurance Rates youcomparequotes 16869
26 Good Driver Car Insurance Rewards Safe Driving youcomparequotes 17386
25 How to File an Auto Insurance Claim youcomparequotes 17024
24 Avoiding Deer Collisions While Driving youcomparequotes 17491
23 Cheap Auto Insurance through Safe Driving youcomparequotes 16847
22 Auto Insurance Basics That Save youcomparequotes 17248
21 It's Official - Men Are Terrible Drivers youcomparequotes 18752
20 Car Insurance Quote Saves Money and Stretches Income youcomparequotes 17500
19 Auto Insurance Quote Heavily Dependent on Driver Behavior youcomparequotes 17024
18 Car Insurance Quotes Separate Fact from Fiction youcomparequotes 17284
17 How What You Drive Affects Your Auto Insurance Quotes youcomparequotes 17057
16 Cheaper Car Insurance in 8 Easy Steps youcomparequotes 17408
15 Save Hundreds on Your Car Insurance Without Switching to Geico youcomparequotes 16897
14 Your Options in Motorcycle Insurance youcomparequotes 16874
13 The Advantages of RV Insurance youcomparequotes 17246
12 Enjoying the Classics: How to Insure Your Old Relic youcomparequotes 34753
11 Insuring Your Teen Driver youcomparequotes 17019
10 The SR22 & Car Insurance youcomparequotes 16502
9 Auto Insurance & Generic Parts youcomparequotes 17210
8 A Trip Gone Wrong: Summer Breakdown on the Road youcomparequotes 18345
7 Drowsy Drivers, Wake Up! youcomparequotes 16509
6 Cheap Car Insurance Protection You Deserve youcomparequotes 17886
5 Top 8 Safety Picks for Car Insurance Discounts youcomparequotes 17315
4 Drivers: 7 Important Facts about Texting That Could Save Your Life youcomparequotes 21412
3 Buckles: Use Them for Safety, Not for Show youcomparequotes 16816
2 Auto Insurance Quotes youcomparequotes 17279
1 Why You Should Give Thanks -- And Stay Home This Year youcomparequotes 17540
XE Login