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| Auto Insurance FAQ's |
| Click on the questions below to see the answer. |
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| What are the best liability policy limits? |
| What is the difference between comprehensive and collision? |
| What are the minimum policy requirements? |
| How does my driving record affect my insurance premium? |
| My car was totaled and my policy did not pay what I think my car was worth. Why? |
| My teenager just got his license, I do not allow him to drive my car. Does he need to be insured ? |
| What do insurance companies consider when they decide whether to cancel or not renew policies? |
| Does everyone have to have auto insurance? |
| How to shop for car insurance? |
| Why is my credit score used to determine my car insurance rates? |
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Answer: It is generally accepted among insurance agents that the state minimum policy limits are not enough. Most insurance professionals would agree for the average driver the best liability limits to have are 100/300/100. This means:
100,000 per person for bodily injury
300,000 per accident for bodily injury
100,000 per accident for property damage
Since in most areas medical treatment is in fairly the same range, the last limit, per accident for property damage , is the one you may want to take into account if you are not the average driver.
If you live in an area where you feel that if there was an accident, that was your fault, and property damage may exceed 100,000, you may want to consider higher limits. Remember, property damage is the other person’s car and any other property damaged during the accident if you are at fault. In some areas one’s landscaping can cost over 100,000! |
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Answer: Collision coverage is when you have a collision with something like another car.
Comprehensive coverage is when it is anything else other than a collision such as fire or theft. Most People would have both coverage’s when using the car on a regular basis. Sometimes when one is just storing a car they may only keep comprehensive. Coverage since they are not using it on the road therefore, it is unlikely to be in a collision. |
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| Answer: Liability is required in every stat unless you can prove financial responsibility and minimum liability requirements can be found on your state insurance commissioner’s. limits vary widelyf rom state to state and, if you carry the minimum limits, when you drive into another state you will automatically assume that state’s minimum liability requirements. |
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| Answer: The premium you pay is a direct reflection of your driving record for the past three to five years depending on the insurance company. Insurance companies order driving records from the DMV off your residence state and from other states where you’ve been licensed. |
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Answer: Most auto insurance policies pay the actual cash value (ACV) of a vehicle totaled in an accident. The ACV is equal to the market value of an auto immediately before the accident.
Insurers must use a fair and reasonable method to determine the value of your car. If you have concerns about their decision you may be able to negotiate with your insurer by telling them why your car may have had more value that what the insurance company originally determined. |
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| Answer: In most cases, yes. Automobile insurance policies require every licensed person in your household to be listed on your insurance policy unless they have a completely separate policy of their own. This includes a teenager who just received their license or a college student who still uses your address as their residence and/ or visits regularly on weekends, vacations, etc. |
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| Answer: Insurance companies evaluate the risks associated with each policyholder to determine if you are a “good risk” or if your policy should be canceled or not renewed. Insurance companies, among other factors, will primarily review your claims, driving, and credit history. It is most favorable that your policy will not be canceled if you don't have a history of filing frequent claims, have maintained a clean driving record and your credit history is good with no bankruptcy’s. |
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Answer: Yes, automobile liability insurance, or proof of financial responsibility is required in all fifty
states. Although each state sets their own limits on how much insurance is needed these are only minimum limits and in most cases additional coverage is needed if you don’t want to have to pay addition expenses out of pocket. If you have a lease or loan on your car you are usually required by the lender to have comprehensive and collision coverage in addition to the state required liability coverage. |
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| Answer: Not all insurance companies are the same. If you shop around you can save $200-$500 or more with discount rates from all major carriers and even from local companies.
Make sure you get it in writing before you cancel your old policy. Sometimes the new company may quote you a lover rate without looking at your credit score or driving record and then once they do, they’ll issue the policy at the much higher rate.
Rates can vary dramatically for the same driver, depending on which company you ask. The key to savings lies in comparing many quotes, to find the insurer that will give you the best rates and the best service. Because what good is it to save $300 when you have to wait a week before you can speak with a claims adjuster? |
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Answer: This practice has been going on for a few years now. Insurers use a modified credit score to
Come up with an insurance credit score which will give your insurance company an indication of the likelihood of someone filing a claim based on this credit score. In other words, the lower your insurance credit score, the more likely you are to file a claim, inflate the amount of the claim and commit fraud. And since you are perceived to be a higher risk based on a low credit score your insurance company can charge you a higher premium.
The better your credit score the better and lower your auto insurance premiums will be.
Your insurance credit score is not the same as your FICO credit score. It doesn’t tell the insurance company if you can qualify for a loan or a credit card, it tells them how will you manage that loan or credit card.
So, if you manage your credit well, it stands to reason that you will manage major purchases, such as your home and car, just as well. If you have proven you can handle money well, your insurance credit score will reflect that and your premium will be lower because statistics show that you will handle your car or home well and not file a small claim or numerous claims. |
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Call 866-607-4906 Toll Free
Ext. 5282 Ask for Tonia
Tel: 214-607-4906 , Fax: 866-436-2810
8405 Lakeview Parkway, Suite 212
Rowlett, Texas 75089 |
