Auto Insurance Explained

We depend upon our vehicles regularly so having the right auto insurance coverage is important. However, understanding auto insurance can sometimes seem complicated. Learn more and get the answers you need to effectively Shop and Compare rates for auto insurance.

Review these important answers to some of the frequently asked questions we receive about auto insurance.

Note: The responses and quick tips provided are basic information for auto insurance explained. Specific procedures, policies, protocols, and requirements may vary.

• What Is Auto Insurance and Why Do I Need It?

• What Are The Most Important Things To Consider When Purchasing Auto Insurance?

• How Are Auto Insurance Rates Determined?

• Why Do Insurance Rates Vary So Much?

• What Affects My Individual Auto Insurance Rates?

• What Information Do I Need To Have Available To Get A Quote?

What Is Auto Insurance And Why Do I Need It?

An auto insurance policy is a contract between you and an auto insurance company. You pay the premium, and in return, the insurer agrees to pay for any car-related losses detailed in the policy. Most states require that all drivers ha ve an auto insurance policy, or the ability to provide evidence that you have the financial resources to pay for injuries or damages. Severe civil and criminal penalties may be incurred if you do not have insurance, including:

• Vehicle impoundment

• Revocation or suspension of driver's license

• Lawsuits

• Fines

• Imprisonment

What Are The Most Important Things To Consider When Purchasing Auto Insurance?

Here is a list of things to consider when buying auto insurance:

• Determine the legal minimum requirements of your state for auto insurance. For example, in California the minimum requirements are $15,000 per person, $30,000 per accident, and $5,000 in property damage. Check with your local Department of Motor Vehicles for more information.

• Choose the amount of liability coverage that meets your needs. Consider the value of your automobile, your net worth, and type/conditions automobile to be driven under.

• Decide if you need optional coverage. Other types of coverage include collision, comprehensive, uninsured or underinsured motorist, and towing and rental reimbursement.

Once you have decided what coverage you want include in your policy, you need to determine who to purchase the insurance from. Contact Us and we will help you choose a company with the services and rates that best meet your needs by presenting a number of carriers where available.

How Are Auto Insurance Rates Determined?

Insurance companies use statistical history to determine current rates. Rates are based on the amount needed to pay all claims and insurance company business expenses.

Why Do Insurance Rates Vary So Much?

You might think that your auto insurance rate would be pretty much the same no matter which company you choose. But auto insurance rates can vary widely for a number of reasons:

• Varying claims experience
  Auto insurance is priced to cover the costs of accidents that may happen in the future. Since companies cannot see into the future, they use information about their past claims experience. Since each company has had different claims experiences with the groups of people they insure, the rates charged can vary.

• Varying costs of doing business
  Each company's cost of doing business (how much they pay to sell and service policies), along with their financial goals, is different, resulting in different prices being charged to consumers.

What Affects My Individual Auto Insurance Rates?

A number of factors can affect the cost of your automobile insurance. Age, make and model of car, driving record, purpose the car serves, where you keep and drive your car, and your credit rating all affect insurance rates.

What Information Do I Need To Have Available To Get A Quote?

• Current insurance policy information.

• Current vehicle and driving record information.

• Driver's license number for each driver.

• Vehicle Identification number (VIN).