Life Insurance FAQs

Why do I need automobile insurance?

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Every state requires auto insurance. Most auto dealers require insurance if you need a car loan. If you cause an accident and do not have insurance, you have to pay for the damages you cause yourself. If your car is stolen and you don't have insurance, you have to pay for a new one yourself plus pay back the loan on the stolen car.

What are the different kinds of coverage in automobile insurance?

There are basically two kinds of coverage. Liability insurance covers damages you cause, including damage to property or injuries to yourself and other people. It may also pay to defend you in court if you are sued. No-fault insurance covers damages regardless of who caused the accident.

What is the difference between collision insurance and comprehensive insurance?

Both insure your automobile. Collision insurance pays for damages caused by a collision with another automobile or if your car is damaged. Comprehensive insurance includes theft, vandalism, damage caused by hail or other weather conditions, etc.

Is it okay to drop collision and comprehensive insurance?

If you lease your car or have a loan on it, you probably will be required to have collision and comprehensive insurance. As your car gets older and loses value, you may consider buying a lower amount or even dropping these kinds of insurance.

What is the difference between uninsured motorist and underinsured motorist insurance?

Your own policy may help you out if the other driver who caused the accident does not have any insurance at all. This is "uninsured motorist" insurance. Sometimes the other driver has a limited amount of insurance. For example, it may top out at $50,000. Yet your damages are catastrophic – well over a million dollars. In this case your "underinsured motorist" insurance will pay your damages.

What should I look for in automobile insurance and medical expenses?

You may want a policy that pays for treatment at the scene of the accident and funeral expenses of anyone killed. You might want coverage for expanded medical expenses not covered under your health insurance such as rehabilitation, child care expenses, lost wages, etc. Try to take the policy with the highest possible maximum you can afford.

What affects the price?

A policy with a high level of coverage will cost more than one with just the minimum coverage required by state law. Your driving habits, your age and sex, your criminal record, the number of stolen cars in your area, the kind of car you drive, where you drive, safety and anti-theft devices on your car, and other factors will affect the price of your insurance. Some insurance companies even look at your credit history.

How do deductibles lower the cost of auto insurance?

A deductible is the amount of money you are required to pay yourself before your insurance coverage begins. If you take a $500 deductible, any damages under that amount you will pay yourself. Deductibles lower the cost of your insurance because you are assuming some of the risks yourself.

Are there discounts available?

If you have a good driving record, you may get a break on price. Students with good grades may qualify for a discount. If you lower the number of miles you drive per year by joining a car pool or using public transportation, you may save money. When you buy a new car, remember that some cars cost more to insure than others. Some companies give you a discount if you insure more than one car.

What is the best way to find cheap automobile insurance?

Policies with exceptionally low rates are not always the best value. You want a policy from a stable company that pays its claims. You need to understand what is and is not covered in case of a catastrophe. Use this website to compare prices from A-rated companies in your state.

Tidbit: Common search misspellings include: auot and insurence.