Read our informative cheap travel insurance FAQ

Q: Suppose I lend my car to a friend; is that covered under my auto insurance policy?
A: Whenever you knowingly loan your car to a friend or an associate, he or she will be covered under your policy. In fact, even if you don’t give explicit permission each time a person borrows your car, someone is still covered under your policy as long he or she had a reasonable belief that you would have given permission to borrow the car.Top

Q: What does my auto insurance policy cover when I rent a car?
A: The answer to this question is not simple. In the not-too-distant past, most auto insurance policies would extend coverage to rental cars whenever you rented one. This is not quite true anymore.

In most cases, your personal auto insurance policy will cover only vacation car rentals. Many insurance companies no longer extend personal auto insurance coverage for business travel. Find out what rental car coverage you have under your policy is by calling your insurance agent/company

Q: What is the difference between collision physical damage coverage and comprehensive physical damage coverage?
A: Both collision and comprehensive coverage are in Part D.

Collision is defined as losses you incur when your auto collides with another car or object. For example, if you hit a car in a parking lot, damages to your car will be paid under your collision coverage.

Comprehensive covers most other direct physical damage losses. For example, damage to your car from a hailstorm will be covered under comprehensive coverage.

It’s important to know the differences between collision and comprehensive coverage to make an informed buying decision. Also keep in mind that your deductibles in these two categories are often different

Q: What should I do if I have an accident?
A: Your responsibilities after you have an accident are proscribed both by state law and by your insurance contract. Obviously, the first thing you should do is be sure everyone is all right and call an ambulance if needed.

Second, for most accidents in most states, the police should be notified.

Third, give the other driver(s) involved your name, address, telephone number, and the name of your insurance company and/or your insurance agent. Get this same information from the other driver(s).

Fourth, as soon as possible, contact either your insurance agent or your insurance company to notify them that you have been in an accident.

Finally, there are conditions in the insurance contract you must satisfy to receive compensation from your insurer. For example, you must cooperate with your insurer during any investigation during the claims settlement process. Not completing any of these actions can result in non-payment by your insurance company for losses that otherwise would have been covered

Q: Why does the premium for my auto insurance go up if I have an accident or get a ticket?
A: Actuaries and statisticians who have studied the behavior of people involved in accidents have shown that people who have either had an accident or received a ticket recently are more likely to have another accident in the next couple of years than people whose recent driving record has been incident-free.

Insurance companies use this information not to punish people, but to charge them a premium that reflects their likelihood of having an accident. People who are more likely to have accidents should expect to pay higher premiums.

Q: How can I insure my motorcycle?
A: You can add a miscellaneous-type vehicle endorsement to your existing auto insurance policy. This endorsement will also cover mopeds, motor homes, dune buggies and other motorized vehicles

Q: What is no-fault insurance?
A: It’s a type of insurance by which the victims of an auto accident are compensated by their own insurance company, no matter who caused the accident. This outcome is different from what occurs under the traditional tort system of compensating victims of an accident.

In the tort system, the party who is at fault is required to compensate the victims of the accident. The idea behind no-fault insurance is to keep small claims from being settled in our expensive legal system. To accomplish its purpose, no-fault insurance restricts the injured person's right to sue the negligent driver in those instances where the loss falls below a certain threshold.

Two types of thresholds are typically used: verbal thresholds and dollar thresholds. A dollar threshold proscribes a dollar limit that a claim must reach before the injured person regains his or her tort rights (the ability to sue).

A verbal threshold uses a written description to determine when the injured person regains his or her right to sue. For example, someone might regain tort rights if an accident caused a serious handicap, such as permanent loss of a bodily function.

A verbal threshold uses a written description to determine when the injured person regains his or her tort rights. For example, a person might regain his or her tort rights when the accident caused a serious handicap, such as permanent loss of a bodily function

Q: What do I gain and what do I lose by giving up my tort rights?
A: Proponents of no-fault insurance argue policyowners gain several things by giving up their right to sue in minor accidents. For example, under no-fault insurance you typically pay lower automobile insurance premiums, collect claims payments faster, and spend less time in court. The biggest thing you lose by giving up your right to sue is the ability to collect payments for pain and suffering. No-fault insurance only pays your direct economic losses, such as hospital bills, lost wages, etc. It does not compensate you for any pain and suffering damages you may incur from an accident.

However, in most serious accidents, where the likelihood of incurring these non-economic losses is greatest, you regain your tort rights and therefore the ability to sue the negligent party for pain and suffering

Q: I live in a state where I can pick either no-fault coverage or traditional tort coverage. Which one should I choose?
A: Which one you choose depends on your tolerance toward the chance that you may not be able to sue for pain and suffering damages in all accidents.

However, since the thresholds where you regain your tort rights are usually low, many policyowners choose the no-fault coverage because it can mean substantially reduced premium costs

Q: What factors affect the cost of my auto insurance?
A: The type of car you drive, what you use it for, your driving record, where you live and even your marital status can all affect how much your policy will cost. It’s all based on numbers; for example, statistics show that married people have fewer and less costly accidents than single people

Q: What should I consider when buying auto insurance?
A: Things you should consider when purchasing automobile insurance include:

Decide how much liability coverage you want to carry. This is highly subjective. The liability levels you have on your other policies can serve as a guideline. Consult a financial professional if you need more advice.
Determine which optional coverage you will need to feel protected. For example, do you want the optional physical damage coverage in Part D, or is the market value of your car too low to warrant purchasing them?
Once you have decided what you want, you can now choose from which type of company you want to buy a policy.
Decide whether you want an insurance agent to assist you in your decisions or if you wish to buy the insurance directly from a company that sells insurance over the phone or through the mail.

Q: How can I lower my auto insurance rates?
A: The easiest way is to shop around. It’s not surprising to find quotes on auto insurance that can vary by hundreds of dollars for the same coverage on the same car. When you shop, be careful to make sure each insurer is offering the same coverage. Many insurers use the ISO policy forms, which make comparing easy, but this is not always the case.

Another way to lower costs is to look for discounts that may apply to you. For example, many insurers will offer a discount if you insure multiple cars under the same policy, or if you have had a driver education class in the last 5 years. Be sure to ask your agent or company about their discount plans.

Another easy way to save is to increase your deductible. Simply bumping a deductible from $250 to $500 can lower your premium - sometimes by as much as 5 or 10 percent. However, make sure you have the financial resources necessary to handle the larger out-of-pocket costs in the event of an accident

Q: Do you Need It?
A: It is a legal requirement that either you have insurance, or be able to provide evidence that you have sufficient financial resources to pay any amount you may owe in the event of an accident. It is generally a good idea to get it. It protects you and your family in the event that either you get injured, as well as if the other parties get injured as well. States differ in the amount of insurance that you need to have. See State Minimum Requirements to see what the minimum is in your state. This doesn’t mean that you should just go with the minimum requirements. Keep in mind that you will be responsible for any financial losses above what your policy covers. If someone gets injured and needs any type of extensive therapy or long term care, you may be liable for that. You may even be liable for any earnings that someone loses due to being injured. These are all factors that should be considered when choosing the amount of insurance you need.