Auto insurance can be a complicated concept to drivers both new and mature, given the nature of different policies, coverages and premiums that each insurer seems to offer. Below are five of the most commonly asked car insurance questions and their answers.
1. Do I Need Auto Insurance?
Legal requirements for auto insurance vary state to state rather than mandated by federal law. This means that the amount of car insurance you are required to have differs depending on where you live. In New York, for example, you must carry at least:
$25,000 bodily injury liability per person
$50,000 bodily injury liability per accident
$10,000 property damage liability
$50,000 personal injury protection (or no fault insurance)
However, full coverage is recommended for most drivers.
2. What Happens if I Don’t Have Car Insurance?
As with the requirements of auto insurance vary per state, so do the repercussions for not carrying it. If you are caught driving without auto insurance, you could face fines, lawsuits, license suspension and potential jailtime.
3. What is Liability Car Insurance?
Liability car insurance covers expenses related to damages and injuries you may cause someone else while operating the insured vehicle. It is separated into two categories: bodily injury liability and property damage liability. This insurance can cover expenses such as property repair or replacement, medical bills and lawsuit costs in case an injured party decides to sue. This insurance is required in most U.S. states, although at different limits.
4. Why is Auto Insurance Expensive?
The cost of auto insurance depends on several factors, some of which are personal and others which are out of your control. Some of the main factors influencing your car insurance rates include your age, gender, location, driving record, credit score, coverage limits, value of the vehicle and more. If you feel you are paying too much for insurance, be sure to compare quotes and review your options. Also keep in mind that a single accident may stay on your record for three to five years or more, so switching insurers immediately after an accident isn’t always the best choice to save money.
5. Can I Be Denied Auto Insurance?
In rare cases, you may be denied auto insurance. Certain insurers will not cover “high risk drivers,” which are drivers who have a poor driving record or low credit score. If you are a high-risk driver, you may have a more difficult time finding auto insurance.