You’re looking for car insurance. What are you going to need to know? There are many things that people ask me when they visit my office. Here are some answers to common questions.
1. Are my rates going to go down if I renew my policy? Our clients think that insurance rates are determined by how long they have been with the same company. Although there are discounts offered by most insurance companies, these discounts don’t usually kick in until you have been with the company for at least 3 to 5 years. Rates are determined by a number of factors such as the length of time since you have had insurance, whether you have had any accidents or tickets, how many years you have had insurance, and how well your local company has performed.
- Tip. Ask your agent what they have seen happen in the past. You may be eligible for loyalty bonuses if you renew your policy every six-months.
2. What is the grace period for cancelling my policy? Most policies are valid for 5 to 7 days after the due date unless you are renewing. There is no grace period for renewal. You must make the payments on time in order to keep your coverage in place in case of an accident.
- Tip. Be sure to know how long your grace period is. Talk to your agent to ensure you are covered at all times. You can avoid policy lapses by setting up automatic bank draft payments to your policy. You won’t be late on your payments and there will not be a grace period.
3. What coverage does the state require? –
Arizona requires Bodily Injuries Limits of $15,000 per Person / $30,000 per Accident and $10,000 for Property Damage Liability.
New Mexico currently has Bodily Injury Liability Limits of $25,000 per Person / $50,000 per Accident and $10,000 for Property Damage Liability.
- Tip. I don’t think you should rely on the State to save your life if you don’t have anything to lose. Talk to your agent to determine what is best for you and your family.
4. What is the average length of tickets and accidents that stay on my insurance records? Tickets can usually stay on your record for between 3 and 5 years depending on what ticket you received. Speeding tickets and minor offenses usually remain on your insurance record for three years. Driving under the influence (DUI) and other major violations can remain on your insurance record for up to 5 years. Accidents can remain on your insurance record for 3 to 5 years depending on which insurance company you have.
- Please note. Ask your agent for more information about your policy.
5. What is the deadline to add my children as operators on my policy? Your young child should be licensed to drive a motor vehicle and added to your policy as soon as they are licensed. Add them to your policy once they are able to file Motor Vehicle Reports. This is the only way you can ensure they are drivers covered by your policy. Many people worry about the extra cost of adding their children properly to their insurance. Consider the costs of not adding your children to your insurance. Even if injuries are minor, an uncovered loss of liability could prove to be very costly. The cost of health care has tripled over the past 10 years. A visit to the ER can result in a bill of tens or thousands of dollars.
- Tip. When you add your child’s name to your insurance policy, you could be eligible for a discount of up to 70%. This could help you save hundreds of dollars each year.
6. What if I let someone borrow my vehicle? Your insurance will cover Uncle Bob’s use of the vehicle and as long as he has a valid driver’s license.
- Tip. Most people who are allowed to use your vehicle for a short time will be covered, except if their license has been suspended, revoked or invalid.
7. I recently got divorced. Can I Get My Ex Off My Policy? – The State regulates auto insurance companies. All States are common law States. Your insurance company cannot remove your ex-spouse without your consent. To remove an ex-spouse from your policy, insurance companies require their signature. Most insurance companies will allow you split-off your current policy to create your own. This leaves the spouse in control of the original policy.
- Tip. Talk to your ex-partner to make things easier.
8. What is the difference between Preferred (Standard) Insurance Companies and Non-Standard? – Most major insurance companies have two sub-companies. A Preferred company, which they place all the good risk into, and a Standard company that they put all the bad risks into. The Non-Standard company is for those with high-risk drivers. If you have a clean driving record and a history with continuous insurance, it is often easy to get into a preferred company. It is nearly impossible to obtain a Preferred insurance policy for those with poor driving records, accidents or who don’t have any insurance in the last 30 days. Major insurance companies offer a Non-Standard option that allows them to take on those risks until they are eligible for Standard or Preferred.
- Fact. Fact. For the next few years, you can expect to pay more if you are placed in a Non-Standard business.
9. Insurance companies use my credit to rate my policy. – Many insurance companies can’t ignore the importance of running credit reports. Major insurance companies will request a credit report from you when you apply to insurance. This is because credit risk and insurance risks are directly related. Statistics show that drivers with good credit ratings are more likely to file a claim and the severity of their claim will be lower. The other side of the coin is that drivers with poor credit ratings are statistically more likely to file claims.
- Fact. Fact. You may be able to save money by switching your business to an insurance company that uses credit as a rating element – even if your driving record is not perfect. There’s another side to this coin. You can save money if you have poor credit. Credit is not a factor for many insurers.
- Tip. No matter your credit score, it is important to talk to your agent in order to ensure you are in the best financial position possible.
10. I See the Commercials on T.V. How to get money back and how to “Vanishing Deductibles”. Is it worth it?
Companies are increasingly offering bonuses for safe drivers and rebates towards your next renewal, if you haven’t been in any accidents or received any tickets. These benefits usually come with additional costs so you must sign up for them.
Concerning the “vanishing” deductibles, I would recommend that you stick to a deductible that you can afford. You don’t need to set your deductibles at $1,000 if you don’t have the money. Instead, you can buy lower deductibles. You don’t want to park your car and not save enough money for your deductible so you can get it fixed.
Policies with these bells and whistles often cost more than policies that do not have them. The extras that you can get on a policy should not be the focus of sound coverage discussions. After you have the basics covered, you can start looking for what additional benefits you might want.
No matter your driving record, or your coverage requirements, an insurance professional can show you the coverage options available to you and how they will benefit you. They can explain everything to you. That’s what you want, coverage that will actually help when you file a claim. There are literally thousands, if not thousands, of coverage options available from hundreds to hundreds of insurance companies. It can be confusing. Agents are available to help you choose the right package option for you and your family.