Want to Better Understand Your Car Insurance Coverage? Ask Your Agent These 6 Questions
Car insurance can be confusing. After all, there’s a lot of legal and financial lingo in a car insurance policy.
So, who can you turn to if you’re fuzzy about the details of your car insurance policy? Your Direct Auto Insurance agent of course. An insurance agent knows all about finding affordable car insurance, just like an auto mechanic knows all about repairing cars.
But what should you ask your insurance agent about your coverage? We suggest posing these six questions.
- How much coverage do I need?
There’s no easy answer to this question because everybody’s coverage needs are different.
If you’re financing or leasing your car, the bank, credit union, finance company or leasing company probably requires that you have a minimum amount of coverage, which likely will include comprehensive and collision coverage in addition to liability coverage. Your insurance agent will be able to obtain that information from the lender or leasing company.
If you’re not financing or leasing your car, then you’ll need at least the minimum level of financial responsibility coverage mandated by the law in your state. Forty-nine of the 50 states (New Hampshire is the exception) require motorists to have car insurance; the type and amount of coverage differs from state to state.
- What kinds of coverage are available?
Car insurance isn’t one-size-fits-all. Event in states where car insurance is mandatory, the requirements differ. Your insurance agent can find out which coverage you absolutely need in your state and which coverage you might want to layer on top of that.
According to the Insurance Information Institute, the most basic, legally required car insurance covers damage caused by your car, but it does not cover damage to your car.
The Institute says that in most states, minimum auto insurance requirements include:
- Bodily injury liability coverage. This covers costs related to injuries or deaths that you or another driver causes while behind the wheel of your car.
- Property damage liability coverage. This reimburses others for damage that you or another driver behind the wheel of your car causes to another car or to other property, such as a building or a mailbox.
Also, the Institute says, some states require:
- Medical payments or personal injury protection coverage. This covers medical expenses for injuries suffered by you or your passengers. It also covers lost wages and related expenses.
- Uninsured motorist coverage. This reimburses you when a crash is caused by a driver who lacks insurance or by a hit-and-run driver.
- What kind of additional coverage is available?
These are two of the main types of optional coverages available:
- Collision coverage. This reimburses you for damage to your car that happens in a crash with another car or with an object, like a tree, when the crash is your fault.
- Comprehensive coverage. This offers coverage against theft, as well as against non-collision damage due to a flood, fire, or other causes.
Other optional coverage options include rental reimbursement, towing and labor, and accidental death coverage. Your insurance agent can help you decide which extra coverage is best for you.
- How can I get cheaper car insurance payments?
One way to cut costs is to ask about insurance discounts. For instance, if you have multiple cars insured with the same company, you’ll typically qualify for a multi-car discount.
Or perhaps you have a teen driver who just joined your policy and they’re earning good grades. Those good grades could translate into a good student discount and even more affordable car insurance.
You also can lower your car insurance costs by getting rid of coverage that may be unneeded. For example, if you have roadside assistance through your vehicle manufacturer or workplace and your insurance policy also covers roadside assistance, then you could remove this option from your policy.
Life is always changing. That’s why it’s a good idea for you and your agent to review your policy at least once a year to look for cost savings and to ensure your coverage is up to date. You never know when you’ll be eligible for more discounts, more savings, and cheaper car insurance!
- Why did my car insurance premium to go up?
A number of things can trigger an increase in your car insurance premium, such as:
- You were involved in crash that was your fault.
- You were ticketed for speeding or another traffic violation.
- You moved to a different ZIP code where insurance rates are higher.
- You bought a newer, more valuable car.
- Your credit score went down. In some states, insurers can use your credit report or an insurance score that is developed using your credit history to help determine your insurance rate. Data has shown than a person’s credit history is a reliable indicator of the risk that that person will have a claim.
Reasons vary from driver to driver and state to state. Your insurance agent can explain these and other reasons why your premium went up.
- What happens if I don’t pay my premium?
If you fail to pay your premium, the auto insurance company will give you a warning and demand that you pay the premium within a required time period. If you don’t pay, your insurance policy will cancel. If you’re a repeat offender, the insurer might hit you with a financial penalty or even drop you as a customer.
At Direct Auto we understand that sometimes life happens and your might have to miss a payment that causes your insurance to cancel. Whenever possible, we’ll allow our customers to reinstate their policies and we welcome back our customers who have had to let their insurance lapse for a while.
Call, click, or come in to better understand your auto policy! Even if you’re not a currently a Direct Auto policyholder, we can help you find affordable car insurance that includes the coverage you want and need, right now. Come in to a Direct Auto location near you or call 1-877-GO-DIRECT (1-877-463-4732) to learn more today!
By the Direct Auto Insurance carrier & agency members of the National General Ins. Grp., Winston-Salem, NC. This article is for general information or entertainment purposes only. Direct General is not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services or other materials on or available through these websites or resources or your reliance thereon. Any references to third party rates or products are subject to change without notice. Trademarks are property of their respective owners. Direct General policies, payment plans, and discounts are subject to terms and conditions and may not be available in all states. Rates and Savings, if any, will vary. Costs may vary based on how you buy.