An auto insurance policy is a contract between you and an insurance company. You agree to pay a premium for protection, and the insurer agrees that as long as your premium payments are current, the company will pay for covered losses. The policy outlines specifically what is covered and how much you would receive in compensation if you are involved in an accident, your car is stolen or vandalized, or if your car is damaged by some other cause \u2014 for example, a rock thrown from the tire of a large truck or a fallen tree.<\/p>\n
Exactly what risks are covered and how much you would be compensated depends on the details of your specific policy, the deductible you select, and the limits of compensation you agree to. A deductible is an amount that you\u2019re willing to pay upfront before the insurance company pays any expenses when you file a claim. A limit is a maximum amount the insurance company will pay you. In general, the lower the limits and the higher the deductible you choose, the lower your premiums \u2014 and your protection \u2014 will be.<\/p>\n
Policies are usually issued for six-month or one-year timeframes, and premiums can change with each renewal cycle depending on a variety of factors.<\/p>\n
Auto insurance coverage depends on what you buy. There are several categories of auto insurance, and different states have different requirements for what kind of coverage drivers must have. Here are the basic types of auto coverage:<\/p>\n
It depends on the policy, but most standard auto insurance policies will not cover:<\/p>\n
Separate coverages like homeowners or renters, uninsured\/underinsured motorists, gap, and roadside assistance can be bundled with or added onto an auto insurance policy for an additional premium to cover any of the above.<\/p>\n
Even the best drivers take a significant risk every time they get behind the wheel. Auto insurance provides financial help when you or another motorist make mistakes. If you don\u2019t have insurance, you must pay for damages and injuries yourself.<\/p>\n
If you are in a state with no-fault laws, each driver involved in an accident is responsible for their own damages and medical costs. However, if you’re in a state with tort insurance laws and you are at fault in an accident, you are typically liable for the cost of not only your vehicle damage and medical bills but also the other driver’s and injured victims’ damages and medical costs \u2014 as well as the cost of legal fees if you are sued. If the other driver is at fault and is under- or uninsured, they are responsible for your compensation, but chances are they don’t have a lot of assets and you may not be able to recover damages even if you win a lawsuit against them \u2014 so the financial risk will ultimately still fall on you.<\/p>\n
For the cost of your premium, the insurance company will absorb much of that financial risk for you.<\/p>\n
State requirements vary, but 48 states require some level of coverage, typically for property, liability, and\/or medical \u2014 at minimum, enough liability insurance to cover any damage or injuries you could cause. If you don\u2019t maintain auto insurance in these states, you can be fined or serve jail time, and your license can be suspended or revoked. Although New Hampshire and Virginia don\u2019t require you to purchase auto insurance, they do require you to prove that you can afford to be without it, and Virginia won\u2019t issue you a license to drive unless you pay an uninsured motorist fee.<\/p>\n
You can get excellent coverage designed for your specific needs through your Trusted Choice Independent Insurance Agent\u00ae. You also can shop for coverage directly from an auto insurer online, but it can come at the expense of professional expertise and quality customer service.<\/p>\n
Your Jason Herman Insurance agent knows the insurance requirements for your state and can help you find a policy that meets them. Our agents also do the work of shopping among many different companies for you, so you can be sure to get reasonable rates and coverage appropriate for your situation.<\/p>\n
Auto insurance is a manageable expense, particularly when you weigh it against the financial risks it protects you from. Rates do vary from state to state and are affected by several factors, such as whether your car is new or used, its safety rating, your driving record, and your age and gender. Because some areas are more prone to accidents and claims than others, even your ZIP code affects your insurance rates.<\/p>\n
No matter how bad your driving record is, you almost always can find insurance. But if you have a record that includes tickets, accidents, or points on your license, you may be considered too risky for a company or you may be charged a higher premium to compensate for the greater risk of insuring you.<\/p>\n
You can also talk to your agent to determine if you or a driver on your policy qualifies for one of these common discounts:<\/p>\n
While auto insurance policies typically don\u2019t cover commercial use of personal vehicles (such as for ridesharing or delivery side-gigs), you can get a tax deduction if you are self-employed. However, you can deduct only the actual number of miles you drive for business \u2014 not the miles you drive for personal reasons.<\/p>\n
When it\u2019s time to renew your policy, your premium may go up or down (though in most states, costs are currently rising). Some factors that contribute to premium fluctuations include whether or not you filed a claim recently, if there are any incidents on your driving record if the number of crashes in your area is increasing, and if the cost of auto repairs or medical care in your area has increased.<\/p>\n
Moving to a different city or state can affect your premium. As a general rule, premiums are higher in riskier locations and where there are more uninsured drivers.<\/p>\n
You can cancel or void your policy, and your auto insurance company can too in the following circumstances:<\/p>\n
Insurance companies can cancel policies for additional reasons in some states. A local Trusted Choice independent agent can help you better understand the laws in your state.<\/p>\n
There are a few reasons why your claim can be denied, including:<\/p>\n
Your credit score indicates your ability to pay your bills, so auto insurance companies do check credit to determine if you are a good risk.<\/p>\n
Does Getting Auto Insurance Quotes Affect Credit?<\/strong><\/p>\n A credit check for a car insurance quote will not affect your credit rating because insurers are not extending you credit, but simply determining whether you are a good financial risk.<\/p>\n Insurance companies do not share your personal information among themselves. If you file an insurance claim or you are switching insurance companies, information about your claims history is placed into a national loss-underwriting database. That information can be accessed by the insurance companies you want to purchase a policy from.<\/p>\n Remember too that your driving record is public information \u2014 including tickets and accidents.<\/p>\n When you rent a car, you will most likely be offered special coverage at the rental counter. Do you need it?<\/p>\n Most auto insurance policies cover you whether you\u2019re driving your own car or a rental \u2014 unless you\u2019re renting the car for business use. If you\u2019re not sure what your own policy covers, ask your Trusted Choice agent.<\/p>\n Most insurance companies won\u2019t insure a driver whose license is suspended or revoked. You may be able to work with your local DMV to get a hardship license. Many states require high-risk drivers to file an SR-22 (or FR-44) form, which certifies that you have met your state\u2019s requirements for car insurance. Your Trusted Choice agent can help you file an SR-22 form.<\/p>\n If you\u2019re a rideshare or delivery driver, your personal auto insurance usually doesn\u2019t cover any accidents that happen during your gigs. The company you drive for may offer commercial auto insurance, but the policy will only cover you for specified times.<\/p>\n For example, most rideshare companies have insurance plans that will cover drivers after they have accepted a trip and are on their way to pick up a passenger; they\u2019ll also cover the miles driven after the passenger has been picked up until they are dropped off. However, the plans usually won\u2019t cover drivers who have their ridesharing app turned on but are waiting for a pickup request. And personal policies won\u2019t cover that period either because it\u2019s considered commercial use of your vehicle.<\/p>\n Fortunately, many insurers now offer rideshare insurance as a separate policy that can be bundled with a personal auto insurance policy for a more affordable premium or as an endorsement or rider to their personal policy. Hybrid policies that cover both ridesharing and personal auto use are also out there. If you\u2019re using your personal vehicle for commercial purposes, you need rideshare insurance solutions to fill the gap in that gray area between personal and commercial auto insurance.<\/p>\n","protected":false},"excerpt":{"rendered":" An auto insurance policy is a contract between you and an insurance company. You agree to pay a premium for protection, and the insurer agrees that as long as your premium payments are current, the company will pay for covered losses. The policy outlines specifically what is covered and how much you would receive in compensation if you are involved … <\/p>\nDo Auto Insurance Companies Share Information?<\/strong><\/h3>\n
Does Auto Insurance Cover Rental Cars?<\/strong><\/h3>\n
Can I Get Auto Insurance with a Suspended License?<\/strong><\/h3>\n
Will Auto Insurance Cover Me If I\u2019m a Gig Driver?<\/strong><\/h3>\n