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| Auto Insurance Tips for New Residents |
14. If I borrow a car from a friend or relative, will my policy cover me while I am driving the borrowed car?
The policy covering the vehicle would be primary and in most cases, your policy would cover the vehicle on an excess basis. If no policy covers the borrowed car, most companies will treat your policy as the primary coverage for the borrowed car. (Primary means that policy will provide coverage first, and excess means that policy will provide coverage after the limits of the primary policy have been exhausted.)
15. What should I do if I have an accident?
First, discuss with your insurance agent what steps they recommend. You may also wish to refer to your insurance identification card, as the steps you need to follow may be listed on the card.
Generally you should first notify the police. Then write down the names, addresses, telephone numbers and license numbers of persons involved and of witnesses. Also write down the license plate number and state of each vehicle involved. You may even want to keep a disposable camera in your glove compartment to take photos of the accident. Do not admit fault, and do not discuss the accident with anyone except your insurer representative or insurance agent or producer, or the police. Notify your insurance agent or producer promptly. Cooperate and answer all questions fully. Take notes whenever you talk with insurer employees, your insurance agent, lawyers, police or others about the accident. Write down the date, times, names and subjects you talked about and include all decisions or promises made. Save your receipts for such items as car rental or a hotel room if the accident happens out of town, and save copies of all documents you send or receive.
16. I have not had any accidents or violations, so why do my auto insurance premiums continue to increase?
An insurer's premium increases are a direct reflection of the countrywide or statewide pool of losses that the insurer experiences. The losses of the few within the insurer's pool of policyholders are paid for by all policyholders within the pool. This is the basic premise upon which the concept of insurance is based and without which no insurance would be available. This does not mean that your own favorable loss experience cannot be recognized. Various insurers give numerous discounts to policyholders which recognize their excellent driving records. (See next question for type of discounts.) Other reasons for the increase in the cost of auto insurance are attributable to the costs to settle losses such as the costs to repair vehicles and the medical costs for injured persons which continue to rise. The increase in lawsuits is also a major factor in insurer rate increases.
17. Is there any way that I can reduce my premiums?
First, make sure you are taking advantage of the discounts offered by your insurer. Most insurers provide discounts for at least some of the following: accident free drivers discount; a package discount for insuring your home and auto with the same insurer; multiple auto discount; good student discount; nonsmokers discount; and passive restraint discount (for vehicles with air bags or automatic seat belts). Talk with your insurance agent for detail regarding your policy.
Second, drive safely. Avoid tickets and accidents. Don’t drink and drive. A poor driving record adversely affects your rates.
Third, drive a safe reliable vehicle. Before purchasing a new vehicle consider the cost of insurance. Some vehicles such as sports cars, SUV’s, and other high-profile vehicles cost more to insure.
Fourth, discuss with your insurance agent to make sure that you have appropriate coverage’s for you and your vehicle. You may consider higher deductibles for your comprehensive and collision coverage’s.
Finally, be pro-active regarding your credit or insurance score. Many insurers offer discounts for good credit. Understanding and maintaining a good credit score may significantly reduce your premiums in the future.
18. What if my insurance lapses and I drive without insurance?
If you are un-insured you may be ticketed and fined, your vehicle registration may be suspended, your drivers’ license could be suspended and your vehicle could be impounded. If you cause an accident you (and your parents if you are living at home) could be sued. When you apply for insurance again you typically will pay more for your insurance because most insurance companies charge higher rates for previously uninsured drivers.
The policy covering the vehicle would be primary and in most cases, your policy would cover the vehicle on an excess basis. If no policy covers the borrowed car, most companies will treat your policy as the primary coverage for the borrowed car. (Primary means that policy will provide coverage first, and excess means that policy will provide coverage after the limits of the primary policy have been exhausted.)
15. What should I do if I have an accident?
First, discuss with your insurance agent what steps they recommend. You may also wish to refer to your insurance identification card, as the steps you need to follow may be listed on the card.
Generally you should first notify the police. Then write down the names, addresses, telephone numbers and license numbers of persons involved and of witnesses. Also write down the license plate number and state of each vehicle involved. You may even want to keep a disposable camera in your glove compartment to take photos of the accident. Do not admit fault, and do not discuss the accident with anyone except your insurer representative or insurance agent or producer, or the police. Notify your insurance agent or producer promptly. Cooperate and answer all questions fully. Take notes whenever you talk with insurer employees, your insurance agent, lawyers, police or others about the accident. Write down the date, times, names and subjects you talked about and include all decisions or promises made. Save your receipts for such items as car rental or a hotel room if the accident happens out of town, and save copies of all documents you send or receive.
16. I have not had any accidents or violations, so why do my auto insurance premiums continue to increase?
An insurer's premium increases are a direct reflection of the countrywide or statewide pool of losses that the insurer experiences. The losses of the few within the insurer's pool of policyholders are paid for by all policyholders within the pool. This is the basic premise upon which the concept of insurance is based and without which no insurance would be available. This does not mean that your own favorable loss experience cannot be recognized. Various insurers give numerous discounts to policyholders which recognize their excellent driving records. (See next question for type of discounts.) Other reasons for the increase in the cost of auto insurance are attributable to the costs to settle losses such as the costs to repair vehicles and the medical costs for injured persons which continue to rise. The increase in lawsuits is also a major factor in insurer rate increases.
17. Is there any way that I can reduce my premiums?
First, make sure you are taking advantage of the discounts offered by your insurer. Most insurers provide discounts for at least some of the following: accident free drivers discount; a package discount for insuring your home and auto with the same insurer; multiple auto discount; good student discount; nonsmokers discount; and passive restraint discount (for vehicles with air bags or automatic seat belts). Talk with your insurance agent for detail regarding your policy.
Second, drive safely. Avoid tickets and accidents. Don’t drink and drive. A poor driving record adversely affects your rates.
Third, drive a safe reliable vehicle. Before purchasing a new vehicle consider the cost of insurance. Some vehicles such as sports cars, SUV’s, and other high-profile vehicles cost more to insure.
Fourth, discuss with your insurance agent to make sure that you have appropriate coverage’s for you and your vehicle. You may consider higher deductibles for your comprehensive and collision coverage’s.
Finally, be pro-active regarding your credit or insurance score. Many insurers offer discounts for good credit. Understanding and maintaining a good credit score may significantly reduce your premiums in the future.
18. What if my insurance lapses and I drive without insurance?
If you are un-insured you may be ticketed and fined, your vehicle registration may be suspended, your drivers’ license could be suspended and your vehicle could be impounded. If you cause an accident you (and your parents if you are living at home) could be sued. When you apply for insurance again you typically will pay more for your insurance because most insurance companies charge higher rates for previously uninsured drivers.
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