Most consumers are unsure about what type of auto insurance they need, how much they have to pay, and whether there are any options for high-risk drivers.
These and other questions will help you make informed buying decisions about car insurance. Finding the answers to these questions is now easier than ever!
Commonly Asked Questions About Auto Insurance
Can I drive with no car insurance?
No! No!
Each state also has financial responsibility laws. These laws require that you prove to the state that your finances are sufficient to cover any claims you may have due to a serious accident. You will need minimum coverage if you don’t have sufficient proof (which can vary by state).
What is the minimum insurance requirement?
Although minimum coverage amounts may vary from one state to another, all state-required insurance covers your liability for bodily injuries or property damages.
If your state’s minimum auto insurance requirements are 25/40/15, then you will have coverage for $40,000 to all motorists who are injured in an automobile accident. You can also get $25,000 for one person and $15,000 for property damage.
Although this might seem like a good amount of coverage, it is actually a policy that provides only a minimum level of coverage. According to the Insurance Information Institute (I.I.I.), you should have at least $300,000 liability coverage per accident and $100,000 per person. The Insurance Information Institute (I.I.I.) recommends that you have at least $300,000.00 liability coverage per accident and $100,000 per individual. Your insurer will also encourage you to do the same.
What happens to my car insurance if I don’t have it?
You still have options if you’ve been denied car insurance due to your driving record, or any other factor. The I.I.I. gives you two options. You can either join a state-assigned risk pool, or purchase a policy from an nonstandard insurer
A pool of assigned risk is a group of insurance companies in your region that are required by law to take part in proportion to the volume of business they accept. Insurers must accept the motorists they have assigned and then write policies in accordance with their requirements. Premiums can be significantly higher because high-risk drivers are more costly to insure.
You may be able also to get auto insurance policies from non-standard insurers. These private insurers usually write policies for drivers with poor driving records, those who live in high-risk areas and those who own high-performance cars.
These options might require you to spend more money, but they could be your only option for auto insurance until your situation improves. Keep shopping around to find the best premium price.
What is the difference between cancellation and non-renewal of a policy?
Your insurer or you can decide not to renew your auto policy after it expires. If you aren’t satisfied with the service or if you can find a better deal elsewhere, you might not renew your auto insurance policy.
If you do something that significantly increases the risk of your insurance company not covering you, or if they decide to write fewer policies in your region, an insurer might cancel your policy.
On the other hand, cancellation is more serious. The I.I.I. prohibits insurers from cancelling policies that have been in effect for more than 60 consecutive days, unless:
- You don’t pay your premium
- You defraud the company
- Your driver’s licence is suspended or revoked
Cancelling your policy could also make it more difficult to find insurance in future. This may lead to you having to purchase a higher-risk policy with a higher premium.
What happens if my insurer is not satisfactory?
You have rights as a consumer when it comes to auto insurance. Let your agent know if you are not satisfied. If you are still not satisfied with your agent, contact the consumer complaint department of the insurer and file a formal complaint.
Contact your state insurance department if your problems persist. They can help you find an insurance company or provide education and protection for consumers. For more information, you can call your insurance department or visit them online.
Knowledge is power!
Answering your questions about auto insurance is the first step in becoming an educated customer. This will allow you to make informed purchasing decisions about affordable vehicle insurance. Contact your state insurance department for more information about auto insurance.