As an independent insurance agent in Franklin, TN, part of my job is answering important auto insurance questions and helping individuals, such as yourself, find the best car insurance deals and coverage. To make things easier, I decided to compile a list of car insurance frequently asked questions (FAQs) that I’ve received throughout the years.
Auto Insurance Frequently Asked Questions: What You Need to Know
1. What is car insurance and what does it cover?
An auto insurance policy is a document that transfers part of the financial risk that comes with owning a car to a company called an insurance carrier. If something happens to your vehicle, your carrier will step in and pay for the damages of a covered loss.
There are numerous coverage options to choose from, but the most common are:
- liability insurance, that covers for damages caused to another party, and includes bodily injury and property damage coverage;
- uninsured/underinsured motorist insurance, that helps you pay for damages when the at-fault driver doesn’t have enough liability coverage;
- collision insurance, that helps you pay for damages caused by hitting other objects or vehicles (fences, lamp posts, potholes);
- comprehensive insurance, that covers acts of vandalism, collisions with animals, and other such happenings that may damage your car;
- gap insurance, which bridges “the gap” between your vehicle’s actual cash value and its loan amount (the difference between how much you owe on the vehicle and how much your vehicle is actually worth today).
I’ve covered and explained all the different types of car insurance in a separate article, so make sure to give that a read and learn what’s what.
2. How does car insurance work?
It’s quite simple, really, all you have to do is file a claim. Once an insured event occurs, you contact your independent insurance agent or insurance carrier directly and they’ll tell you exactly what to do.
3. Why do I need car insurance?
For the same reason you need a savings account or a good retirement plan – so that an unforeseen event won’t leave you bankrupt. A good auto insurance policy can help cover you for vehicle damages, bodily injuries, or funeral costs. Ultimately, it’s about peace of mind and knowing that you can act fairly and properly compensate others in the event of a car crash.
4. Is car insurance mandatory?
Each state has its own auto insurance requirements – in Tennessee, for example, you need to carry a minimum amount of liability insurance for bodily injury and property damage. You can check out our state’s car insurance requirements in our Auto Insurance Requirements in Tennessee – What You Need to Know blog post.
5. How do I buy car insurance?
You can get in touch with an independent insurance agent in Franklin, TN – such as yours truly – who will help you find the best deal for your individual circumstances, you can opt for online quote comparison tools, or you can contact some carriers directly and ask for a quote. Naturally, I recommend working with an independent insurance broker, as it will help you save valuable time and money in the long run. Feel free to get in touch for more information.
6. What is an insurance quote?
A quote is simply a cost estimate for your automobile insurance policy.
7. How long does it take to get an auto insurance quote?
Not long. Thorough, personalized insurance quotes from local insurance agents may take a few hours to put together. Online quote generators will give you the information you’re looking for in a matter of minutes.
8. What information do I need to provide to get a car insurance quote?
You’ll need to provide personal information such as your name, date of birth, and driving history (no. of past accidents or incidents), as well as information about your vehicle (model, year, mileage, etc).
9. What is a car insurance premium?
An auto insurance premium is the payment you make on a regular basis to keep your policy alive and kicking. You can pay it up front when you purchase your policy or opt for recurring installments.
10. What is a car insurance deductible?
An auto insurance deductible is an amount you are responsible for prior to your insurance company paying a claim. Once your deductible is covered, your insurance carrier will pay the rest: for example, if your car suffered vandalism damages estimated at $10,000, you may be responsible for a $1,000 deductible before your insurance company can reimburse you for the remaining $9,000.
It’s good to know that not all coverages have deductibles – they are most common with comprehensive and collision auto coverages. Note that the higher the deductible, the lower the premium, and vice-versa.
11. Is car insurance tax-deductible?
It can be, if it applies to your work vehicle, that you solely use for work purposes. If you spend ½ of your personal vehicle’s mileage on work errands, you should be able to deduct ½ of the insurance costs.
12. How much car insurance do I need?
It depends on your circumstances. In any instance, it’s best to not settle for state-mandated minimum coverage. I suggest getting in touch with an independent insurance agent and take it from there – they will be able to ask the right questions, assess your personal circumstances, and make informed recommendations that will provide the best value for your money.
13. Can I lose my car insurance?
As with any other contract, you can, of course, lose your benefits if you don’t fulfill your end of the deal. You can lose your auto insurance coverage if you don’t pay your premiums, if you provided false information when you filed your application for coverage, or if your license gets suspended or revoked for repeated driving incidents such as DUIs.
14. Can car insurance companies deny claims?
Yes, they can. Read our blog about why auto insurance companies deny claims to find out how this happens.
15. Does my credit score matter when I apply for auto insurance?
Yes. Your credit score is used by car insurance companies to evaluate the risk they undertake when issuing a policy. The same goes for your insurance history, so you can expect higher premiums if, for example, you had a recent lapse in insurance coverage.
16. Does my driving history influence my car insurance rates?
Absolutely – the riskier your driving behavior, the higher your insurance rates. This is one of the many reasons why it’s essential to practice safe driving. To find out what other factors can affect your car insurance premiums, make sure to read our dedicated blog post.
17. Will my auto insurance policy cover a rented car?
Usually yes, but it’s best to double-check your auto policy’s fine print before taking your rental on a joy ride.
18. Will a parking ticket affect my insurance rates?
Not if it’s just one. However, repeated parking violations may hint at reckless driving behavior and can, in turn, negatively affect your premiums.
19. Who can I add to my car insurance policy?
You can add family and household members with the same address or anyone who drives your vehicle regularly to your auto insurance policy.
20. How long does it take to file an insurance claim?
Not long – usually less than 10 minutes. Drop me a line if you need help with your claim and I’ll gladly lend a hand.
21. Can I change or cancel my policy before it expires?
Yes, you can make changes to your auto policy at any time. But first, check your policy for details or contact your insurance agent to make sure cancellation fees don’t apply.
22. Will my car insurance renew if I don’t explicitly cancel it?
Usually, yes, but it’s best to check your policy for this information so as to not accidentally lose your coverage because of falsely thinking that you can rely on automatic renewals.
23. Will my car insurance policy cover theft?
Yes, as long as you opted for comprehensive auto insurance coverage. Keep in mind that most carriers reimburse you for the vehicle’s actual cash value and not its replacement cost, so make sure to take that into account when browsing the market for its replacement.
24. If a friend wrecks my car, will my car insurance still apply?
It usually does, but it’s best to get in touch with your auto insurance agent and review the specifics of your policy to avoid claim denial.
25. How can I lower my auto insurance costs?
There are a couple of ways you can lower the costs of your car insurance policy. First and foremost, ask your independent insurance broker about the special deals he has in store for you – you may be surprised at the discounts they can bring to the table.
A great way to lower your premiums is to bundle your car insurance with other policies, such as homeowners insurance, and get a “package deal”. At Williams, our personal insurance packages come with substantial discounts.
What Other Car Insurance Questions Do You Have?
If you still have questions about car insurance, don’t hesitate to get in touch – Williams Insurance Group is deeply invested in making its customers feel safe and comfortable with their insurance choices. I’ll gladly do the same for you.