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Auto Insurance - Things You Need To Know

Mar 25, 2008
When you apply for an insurance quote, you don't know how much information the insurance company knows about you, and that could dramatically affect the premium you will have to pay for your policy, and could prevent you purchasing auto insurance, if you are not considered to be a good risk.

Your credit report doesn't even have your auto insurance risk score. If you have a really good credit rating, because you always pay your debts in good time, you could be rated highly, in comparison with a person who regularly opens and closes accounts, or gets behind in their payments of their accounts. Insurance scores usually move the same direction as your credit history, but not always.

You will do well in making sure that you have conducted your financial life well, before you actually apply for auto insurance.

Things that may effect your auto insurance acceptance is your driving record, your previous claims history, and where you live. Most states have a required minimum auto coverage. Many states will require that you have personal injury protection also. You should take into account your state's requirements as to how much the minimum is currently, as well as any other requirements you will need in order to place your auto insurance.

If you have had and previous car accidents, the insurance company you are applying to for auto insurance need to be notified of all the details.

The focus of the auto insurance company will always be on auto insurance losses to themselves.

If you decide to take a look at your own motor vehicle insurance report, you can easily access a copy from your state's department. There are also companies that can access your credit history for you, like Truecredit and Experian.

Bodily Injury Liability covers other people's bodily injuries or death for which you could be responsible. This means it does not cover you or anyone else who may be in your car - only the person driving the other vehicle. This policy will protect you against medical bills, loss of income and pain or suffering. Should you require legal counsel, this policy will cover you for that as well. A lawsuit could be filed against you by another party, so you should ensure that you enough auto insurance to cover your expenses without you losing everything you own. All this should be clearly stated in your policy.

Complete auto insurance cover for your vehicle is called comprehensive insurance, and that will cover damage to your car if you have an accident, by flood, fire or animals or if your car is stolen. The insurance policy will pay to fix your car, less your excess attached to your policy. The excess is the deductible that you arrange to pay out of your pocket before claiming from the insurance company. In order to keep your premiums affordable, one usually selects as high a deductible as what you can afford.

If you are driving quite an old car you could consider dropping this coverage, as the coverage is usually limited to the value of the car.

In nearly all cases, your spouse would also be covered by your policy if you have named him/her on your application. It would be a good idea to confirm this with your insurance company before signing and paying them. If you have a partner you live with and s/he drives your car and is involved in an accident, you may not be able to lodge a claim with your auto insurance company, unless you have their permission and s/he has been included on your auto insurance policy.
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