Auto Insurance Basics
Choose from a title below to learn some basic information on auto insurance:
Proof of insurance is a record that you must carry with you to show that you meet your state's general liability insurance requirement. By law you must show proof that you are financially liable for property damage and injuries by your vehicle. While each state may have different liability minimums, nearly all states require that you meet some form of general liability requirement.
Once you purchase an insurance policy, the insurance company should send you proof of insurance which is often in the form of an insurance card or certificate. While some states require insurance companies to electronically report your insurance purchase to the DMV, it is highly recommended that you keep proof of insurance with you at all times.
Insurance Alternatives
Although not commonly known, some states allow you to prove financial responsibility in one of two ways:
A) Make a large deposit with the state treasurer. The amount can vary by state and can range from $25,000 - $100,000.
B) Secure a bond with a surety company authorized to do business in your state.
Most people however, cover their liability with an insurance policy since it continues to be the easiest to obtain.
When Should You Show Proof of Insurance?
You are required to show proof of insurance a) in most states upon registering your vehicle, b) if you are pulled over by a police officer and asked to see your proof of insurance, or c) if you are in an accident.
What if You Don't Have Proof of Insurance?
If for any reason you cannot show proof of insurance in any of the above circumstances, you may be subject to a) paying a fine, b) your registration and driver's license may be suspended, or c) you may be incarcerated.
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Choosing an Auto Insurance Company.
While individual drivers have unique needs, most drivers want a good policy with good coverage at an affordable price. In addition, most drivers would agree that good customer service is a must and that they would prefer to work with a company with a fair and timely claims process.
By using our website, you'll have the ability to access many quotes from insurance companies allowing you to create a comprehensive list of providers.
1) Compare pricing with consumer complaint ratios.
Once you have a list, you can compare the insurance companies with the best rates against the insurance companies with the lowest complaint ratios. The insurance companies that rank the best on both rates and complaints should merit your strongest consideration.
2) Research consumer complaint ratios.
With information technology so readily available to us, researching insurance complaint ratios can be a mere click away. In fact, many state departments of insurance publish consumer complaint ratios on their website. The complaint ratios tell you how many complaints a car insurance company received per one thousand claims filed.
3) Ask your local body shop which insurance companies they recommend
A great way to find out how quickly and smoothly an insurance company handles a claim is to ask your local body shop. Body shop managers regularly interact with insurance companies and they can be a great source of information. They will know which companies are quick to handle a claim and which companies push aftermarket parts instead of original equipment manufacturer parts.
3) Check the J.D. Power Ratings.
J.D. Power and Associates rates major auto insurers with information collected by individual policy holders. The insurance companies are rated according to a) price b) coverage options c) claims handling d) satisfaction with company representatives and e) the overall experience.
The JD Power Consumer Center can be found by clicking here.
Liability auto insurance is the part of the policy covering you in the event you do property or bodily damage to others. There is a minimum required by each individual state and it will vary. However, liability auto insurance should be sufficient to protect you from lawsuits that could take away a home or other assets such as your business.
There should be more coverage for bodily than property damage because the lawsuits for death or injury always surpasses the amount of property value destroyed. Drivers that speed and do not follow the traffic laws should definitely have the maximum coverage. The few dollars extra for the premium giving full bodily injury coverage is well worth it. Once someone is injured or killed, the numbers asked in compensation are astronomical.
Liability auto insurance in madatory in most states whether the auto is new or old. The age of the car has no bearing on liability insurance, but does factor when adding collision coverage. It is important to have a good company behind you that can give professional advice. Hooking up with a company that is not helpful but offers cheaper rates is no bargain. The insurance company should be financially stable. One that is not stable, can be a problem when payouts are needed. The investments of the company under consideration must be carefully analyzed. It goes without saying the company should have a AAA rating from Moody's or Standard & Poor's.
Switching Auto Insuance Companies.
Switching auto insurance companies can seem like an unnecessary and daunting chore. It is important to occasionally look into a variety of companies that are advertising auto policies today. Everything is changing so rapidly in the world. The cost of insurance is just one of them. Extreme competition is the primary factor for price changes within the insurance industry.
Price should not be the only concern when considering switching auto insurance companies. The reputation of the company is vital. The limits of protection and the amount of the deductible need to be checked out. The company's rate of pay-outs and the time involved in the processing a claim are both critical.
It matters what the company's policies are concerning accidents and rate hikes. It is also important to talk to people who actively carry that company's auto insurance. It is also vital to do an Internet search for comments and complaints. There is a great deal of informal information on the web. People's satisfaction or disapproval of all types of companies can be found on many sites, including blogs.
Switching insurance companies is not something that should be done frequently. Yet, it pays to make an occasional inquiry or two concerning competitive pricing and to do an Internet check on one's current provider.
What Really is Basic Coverage?
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The SR22 document is a proof of vehicle liability insurance and is used by the Department of Motor Vehicles in some states. The form generally shows that a licensed drive has the required minimum liability insurance coverage for that specific state. There are several different variations and of this form and is used in different variations by state. And there are forty-two states that do require the form. The form is a temporary requirement in most states as long as future infractions are avoided. Though there are some states that do not require this documentation, a driver is entitled to fulfill the obligation of the form even if a move to a state that does not require it occurs.
Some of the requirements for the SR22 include a conviction of driving without insurance. Receiving an excessive amount of traffic violation over a short period of time. No insurance when last was involved in a car accident. Finally, the loss of driving privileges for driving under the influence, DUI. In a case where driving privileges has been revoked, a form may be required before driving privileges are restored.
Insurance companies that are willing to insure a high risk driver will provide the SR22 if needed. In some cases when the form is needed, the cost of the premium may rise.