aUTO INSURANCE FREQUENTLY ASKED QUESTIONS
Q: What happens if I lie about my driving history?
A: If you lie about your driving history you are committing what is known as “soft fraud”. The insurance carrier can deny you coverage and in some cases cancel your coverage. This is rarely an issue, as most insurance companies obtain MVRs before binding coverage.
Q: What does auto insurance cover?
A: Auto insurance covers the cost to repair your car and your liability to others during an auto accident. It’s important to have an agent go over each coverage with you so that you understand what you are purchasing.
Q: Are there different insurance coverage types?
A: Yes. Coverages include: Bodily Injury, Property Damage, Medical Expenses, Comprehensive, Collision, and Uninsured & Underinsured Motorist.
Q: Is auto insurance mandatory?
A: Yes, auto insurance is mandatory in every state across the U.S. State laws and regulations will vary from state to state. Alabama requires a minimum coverage amount of $25,000 in bodily injury per person/$50,000 in bodily injury per accident total/$25,000 in property damage per accident. While this may be the state’s minimum we recommend at least $100,000/$300,000/$100,000 limits as the state’s minimum is found to not satisfy a serious accident.
Q: What happens if I don’t get auto insurance?
A: If you get into an accident you are still liable for the cost of all damages if you are at fault. You could face getting sued, having liens put on your assets, and/or having your wages garnished until the debt is paid.
Q: Can I put anyone on my policy?
A: You can include members of your household on your policy, but you must all live at the same address. However, you must include all drivers that live in the household on the same policy as the permissive use law does not extend to drivers in the same household.
Q: Can you pay for auto insurance once a month or annually?
A: Yes and yes. Most insurance companies allow you to pay your auto insurance premiums either way. However, you’ll receive a larger discount if you pay annually or set up your monthly premium on auto draft in most cases.
Q: What happens if I forget to pay my premium?
A: Your insurance company will send you a warning notice. This will allow you a set amount of time to pay the premium before the coverage is cancelled.
Q: What is an insurance deductible?
A: A deductible is the amount of the damage that the insured must cover out of their own pockets. For example: If you had $3,600 in damages with a $500 deductible for a covered collision loss, the insurance company would pay the shop or you $3,100 and you would be responsible to the shop for the $500.
Q: Can I change my coverage whenever I want?
A: Yes. You should call your agent to discuss your coverages and why you want to change them. If trying to lower your rates, ask your agent what additional discounts you may qualify for and what suggestions they may have.
Q: Can an auto insurance company deny you service?
A: Yes. Auto insurance carriers can decline to insure a driver based on driving history, driver points, or due to a large liability claim.
Q: Does my credit score really affect my premiums?
A: Yes. Statistical data shows that drivers with high credit scores are involved in fewer incidents.
Q: Will my red car make my insurance bills more expensive?
A: No. This is not true as insurance is not rated on the color of a vehicle. However, if you drive a bright colored vehicle you are more likely to catch the eye of the officer over there in the ditch.
Q: What discounts are available for me?
A: You could receive a discount on your auto insurance for things such as: good driving record, good student, accident free, homeowner, bundled policies, early shopper, and many others. Ask your agent what specific discounts they have to offer and if you qualify.
Q: If I’m driving someone else’s car and get in an accident, whose insurance do I use?
A: You would use the car owner’s. The permissive use law extends the car’s coverage to a person who borrows the car as long as they don’t live in the household or have regular use to the vehicle.
Q: Can an auto insurance company deny your accident claims?
A: Yes. If the carrier proves beyond a reasonable doubt that you intentionally caused damages, where driving recklessly, lied about the accident damages, or lied on your insurance application.
Q: Will my auto insurance pay to have my stolen car replaced?
A: This will depend on what coverages you selected. Comprehensive covers for stolen autos. You would receive the market value of your car minus the deductible when granted the claim. However, theft claims usually take longer due to the time it takes to investigate the incident.
Q: What happens if I cancel my policy before the contract expires?
A: You will not be afforded coverage past the day of cancellation and some carriers will charge a cancellation fee. However if you’ve paid for your insurance past the date of cancellation, these premiums become unearned premiums and must be returned to the insured. Be sure to consult your agent about the specifics of your policy cancellation requirements.