Car Insurance Information: Car Insurance

Car Insurance - Q&A

By Automotive Editor

Here are the answers to some common questions about car insurance ...

Car insurance can be confusing and knowing a little bit about policies and coverage is helpful. Of course, some people are content to feel secure that they are protected by a car insurance policy and don't want to know the details. Most individuals, however, want to be more informed and are asking questions about car insurance. Here are a few common questions and answers about car insurance that can give you a head start to learning more.

If I have a car accident, and it wasn't my fault, will my premium go up?

Generally, if you have an accident and weren't at fault, your premium should stay the same. Frequent claims to your insurance because of car accidents will make your premiums increase. Insurance companies like drivers that are safe on the road, and if they think you may be a reckless or risky driver, the insurance companies will charge you higher premiums.

Do teenagers affect the premiums of my car insurance?

Teenagers are in a group that tends to increase car insurance premiums quite a bit. After all, teens are just beginning their driving experience and are in a high-risk group for accidents. Insurance companies prefer drivers who have proven to be safe and responsible behind the wheel. Expect to pay more for your policy if you include a teen.

Is sharing a car insurance policy a good idea?

Sharing a policy can be a good idea for some couples, as you'll only pay one premium instead of two. However, if one of you has a poor driving record or has many past insurance claims, it may be best to take two separate policies. One person may have higher premiums but the other person's premiums will be lower and the two will even out or even be less expensive than sharing an insurance policy.

My insurance company is asking about credit information. Is this normal?

It can be, depending on where you live. Car insurance companies want drivers who are responsible, and one way of knowing how responsible you are in general is to take a look at your financial history. If you've been careful with your finances and have a good credit record, then insurance companies believe you'll be just as responsible while driving. But before handing over your credit information, check your state laws. Some states have legislation that prevents insurance companies from using credit information.

What type of insurance coverage do I need for my car?

That depends on your needs. A good rule of thumb for car insurance coverage is that if you don't own your car outright, you should make sure that your vehicle is completely covered with collision coverage for full repair or replacement in case of accident. Otherwise, you could easily end up making loan payments on a stolen car while having to take out a new loan to buy a replacement vehicle. Comprehensive coverage will cover expenses in the case of a theft, a fire, or a flood. Liability coverage will cover costs if you're at fault in an accident and have damaged another person's vehicle. Liability coverage will also cover the other person's medical expenses or loss of wages related to the accident.

Next article: Vehicle Insurance - The Legalities

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