Car Insurance

I need to get a quote for car insurance. What information will companies ask for?

• Address, e-mail and other contact information
• Make, model, annual mileage and ownership of your vehicle
• Age, education and occupation for each driver in the household
• Accidents, violations and claims in the last five years
• Name of current insurance company, policy dates, and current liability limits
• Amount of coverage you wish to purchase (your current policy can serve as a reference in determining how much coverage you think you’ll need)

What factors determine the cost of my car insurance?

A variety of factors will impact the price of your car insurance, including the kind of car you drive, your driving record, where you live and work, the purpose the car serves, your marital status and more.

What should I consider when purchasing automobile insurance?

Liability coverage—which provides coverage for bodily injury to any third party that is injured in an accident with you, as well as damage to their vehicles—is the bare minimum all vehicle owners are required to have by law in most states. Purchase the amount of liability coverage that makes sense for your situation. If the car has mid to high market value, you will also want to consider purchasing optional coverage, such as collision and/or comprehensive physical damage coverage. Collision and physical damage coverage will be required by the lender if you have a loan on the vehicle, or if it is a leased vehicle.

Does my insurer check my driving record frequently? If so, how do "points" affect my car insurance rates?

Many states assign “points” to your driving record if you are ticketed for a moving violation (parking tickets don’t count). When you purchase or renew your car insurance policy, your insurance company will review your driving history. Points on your driving record make it more likely that your rates will increase. Each insurance company evaluates applicants differently, so the points on your driving record may or may not affect the rates you pay for auto insurance.

Will my insurance company cancel my auto insurance if I make a claim? I’ve heard some do.  

While it’s unlikely filing a single claim will result in a policy cancellation, your premium might increase, depending on the nature of the claim. For example, if you have an auto accident and it’s your fault, your premium will probably rise. Several at-fault accidents within a certain time period—for example, two or three in a year’s time—may be sufficient grounds for your insurer to cancel your policy.

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I got a ticket. Will my insurance rates increase?

They might. Statistics indicate that people who have received a ticket or have been involved in an accident are more likely to have another accident in the near future than people whose recent driving records are clean. Insurance companies keep prices reasonable for the majority of their customers by using this statistical data to charge a premium that accurately reflects whether a driver is more likely to have a future accident and make a claim.

Why do certain vehicles cost more to insure than others?

When determining base rates for policies, insurers use various industry-wide claim statistics to determine the likelihood of a particular vehicle being stolen, vandalized or involved in an accident, as well as how much it costs to repair. Insurance companies also use their own experience with claim payouts. Vehicles that are more likely to be stolen or cost more to repair are generally more expensive to insure. A few states determine rates for vehicle models, but most leave it up to the insurer.

I loaned my car to a friend. If he has a wreck while driving it, will it still be covered?

Most insurance policies will cover the car regardless of who is driving it, as long as the driver has your permission and is legally licensed. Exceptions do exist, so review your policy if you’re going to let someone else use your car.

My state has "no-fault" auto insurance—what does this mean?

In short, it means that if you have an accident, your insurer will cover your injuries regardless of who caused the accident. In states where a no-fault system is in place, people who are injured in a car accident are limited by the law in their ability to sue for monetary compensation from the owners or drivers of the other cars involved in the accident. Typically, they can seek medical payments and lost wages not covered by their own insurance. Compensation for pain and suffering can only be sought if the injury is “serious,” which is individually defined by each state. The no-fault system is intended to keep premium costs low by reducing lawsuits while providing swift payments for injuries.

What’s the difference between collision physical damage coverage and comprehensive physical damage coverage?

Collision covers losses incurred when your car collides with another car or object.
Comprehensive policies cover most other physical damage losses, such as dents from a hailstorm, vandalism or theft. Deductible amounts are often different between the two types of coverages.

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What should I do if I have an accident?

• First, make sure everyone involved is okay. Call an ambulance if needed.
• Notify the police and file an accident report.
• Exchange name, address, telephone number and name of insurance company with the other driver/s involved.
• Contact your insurance company and let them know you were involved in an accident.
• Comply with any action required in your policy contract—including your insurer’s investigation during the claims settlement process—to ensure payment for covered losses.

Homeowners/Renters/Condo Insurance 

What do homeowner's/renter’s insurance policies protect you against?

The following is typical for most homeowner policies:

• Damage/loss of the home and other structures on the property
• Damage/loss of personal property in the home and other structures
• Injury or harm to third parties who come to your home

The major risks covered by renter's insurance are damage/loss of personal property in the home, as well as liability should a third party be injured while visiting your rental home.

My neighbor's tree fell on my fence.  Whose insurance will cover the damage?

Your homeowner insurance probably will be the one to cover the damage, since your property was affected. However, a few exceptions do exist. If you notified your neighbor in writing that the tree had a large, dead branch hanging over your fence and they chose to do nothing about it, you may be able to get your neighbor's insurer to pay. Keep detailed records of all correspondence and actions, in case you need to contact their insurer.

My home was completely destroyed in a hurricane. Will my insurance company pay my living expenses until I can rebuild?

Most homeowner policies will cover additional living expenses (food, lodging, moving, storage) incurred during rebuilding, but the amount and length of that coverage usually is limited. Keep your receipts for reimbursement purposes.

If I make a claim, will my insurance company cancel my homeowner’s policy?

It's unlikely that your policy will be cancelled for a single claim, UNLESS that claim is for a dog bite and you do nothing to improve the situation (i.e., install a fence). Additionally, homeowner’s insurance premiums are less likely than other policies to increase after you file a claim, particularly if the loss is caused by a natural disaster.

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What about the exterior of my property—how much is covered by my homeowner’s policy?

A standard homeowner’s policy provides protection for personal property and other structures located in and around your home. HO-1, HO-2, and HO-3 are the three standard policy types available for most homes. 

HO-1: Covers only the physical structure of your home, including permanently attached additions (such as an attached garage).

HO-2: Covers other structures on the property, including detached garages, fences, pools, driveways and sidewalks. The coverage limit usually is 10 percent of the HO-1 amount.

HO-3: Covers personal property, including household possessions and other items such as outdoor antennas, drapes and flooring. The limit is usually 50 percent of the HO-1 amount. 

Standard homeowner’s policies include “additional coverage” for items such as debris removal, trees and shrubs, with each coverage having a stated limit. Items that are not covered include cars, motorcycles, lawn mowers and other motorized vehicles, as well as pets and other animals.

I want to rent out my home. How will this affect the insurance?

A standard homeowner’s policy won’t work for property you’re renting to others. Why not? Consider the following:

• You don’t have to cover personal property (unless the home will be furnished).
• As a landlord, you need to be more concerned about liability issues.
• You need to protect yourself against the loss of rental income.

Most companies that sell homeowner’s insurance also offer policies for rental property. Be sure to discuss the options with your insurance company.

My condo association has a master policy. What additional insurance do I need?

Homeowners insurance designed specifically for condo and co-op owners is called HO-6 and protects your personal property from catastrophic loss, including fire, lightning, storm, explosion, riot, aircraft, smoke, vandalism, theft, broken glass and volcanic eruption. An HO-6 policy usually covers improvements, additions, private balconies, private entranceways, private garages and other properties that are stated by your condo association as your responsibility to insure. Liability coverage similar to a homeowner’s policy also is included in most HO-6 policies. Make sure you know exactly what the master policy covers. You will want to purchase additional insurance coverage for what’s not covered under the master policy for your condo and personal property.

Is renter’s insurance really necessary?

While renters don’t carry risk for the dwelling itself, they do risk loss of their personal property within the home in case of catastrophe, like a fire. Renters also risk liability when someone is injured while at the residence. Renter’s insurance protects the renter from catastrophic loss in either situation.

My child is in college. What are my insurance considerations for him?

If your child will be living in a dorm or other university housing, check your homeowner’s policy to ensure his possessions are covered. Electronic items like stereos and computers sometimes aren’t covered—check your policy to be sure. Once your child is living on their own in an apartment or rented house, they should get their own renter’s insurance. Call your insurance provider and review your situation once a year to make sure you have the coverage that is best for your situation.

We had a big storm, and a tree fell on my roof. Am I covered? Will my policy cover costs to remove the tree and clean up debris?

Most homeowner’s policies cover the loss of the tree, the damage caused to your roof, and the cost to remove the tree, but check to see if your policy limits losses for trees and shrubbery. You be able to purchase additional coverage if you have extensive trees and shrubbery around your home.

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