Auto Insurance FAQs: Your Questions Answered
When it comes to auto insurance, most consumers have questions
about the kind of coverage they buy, what they're required to have
and if there are options for high-risk drivers.
Learning the answers to these and other questions can help you
make better purchasing decisions when it comes to car insurance.
And now, finding answers is easier than ever!
Frequently Asked Questions about Auto Insurance
Can I drive without car insurance?
No! Almost every state requires its motorists to carry liability
insurance, which covers damages to people and property resulting
from an accident for which you are at fault.
All states also have financial responsibility laws, which require
you show the state that you have the funds to pay claims if you
have a bad accident. If you don't have proof of sufficient funds
(which varies by state), you'll need to purchase at least the minimum
What are the minimum insurance requirements?
While minimum coverage amounts vary by state, all state-required
insurance will cover your liability for bodily injury and
For example, if the minimum auto insurance requirement in your
state is listed as 25/40/15, this means that you'll have coverage
up to $40,000 for all motorists injured in an accident, up to a
$25,000 for one person in an accident and $15,000 for damaged property.
While this may seem like a healthy amount of coverage, purchasing
the state minimum is really purchasing a bare bones insurance policy.
The Insurance Information Institute (I.I.I.) recommends carrying
at least $300,000 liability coverage per accident and $100,000 per
person--and your insurer will encourage you do to the same.
What happens if I can't find car insurance?
If you've applied for car insurance and been turned down because
of your driving record or other factors, fret not--you still have
options available to you. According to the I.I.I., you have two
options: join a state assigned risk pool or buy a policy
from a non-standard insurer.
An assigned risk pool consists of insurers in your area, who under
state law, are required to participate in proportion to the amount
of voluntary business they accept. As a result, insurers must accept
motorists assigned to them and write policies accordingly. But because
insurers have to take a substantial risk on insuring high-risk drivers,
premiums are significantly more expensive.
Non-standard insurers may also be able to write you an auto insurance
policy. These types of private insurers typically write policies
for motorists with a poor history of accidents, people who live
in "high-risk" neighborhoods and those who drive high performance
While both of these options may have you forking over some extra
cash, they might be your only source of auto insurance until your
circumstances improve. Just remember to keep shopping around so
you can switch insurers once you find a better premium price.
What are the differences between nonrenewal and cancellation
of a policy?
You or your insurer can choose not to renew your auto insurance
policy after it expires for a variety of reasons. You might decide
not to renew your policy if you find a better deal somewhere else
or weren't happy with the service you were receiving.
An insurer may not renew your policy if you did something to substantially
increase their risk to cover you--or if the company decides to write
fewer policies in your area.
Cancellation, on the other hand, is more serious. According to
the I.I.I., insurers cannot cancel a policy that's been in force
for more than 60 days unless:
Cancellation of your policy may also make it harder to find insurance
in the future, thus forcing you to buy a high-risk policy for a more
- You fail to pay your premium
- You defraud the company
- Your driver's license is suspended or revoked
What if I'm not satisfied with my insurer?
As a consumer, you have rights when it comes to your auto insurance.
If you're not satisfied with your agent, let him or her know. If
your complaint still goes unchecked, see if the insurer has a consumer
complaint department and file a complaint.
If your issues remain unsolved, contact your state department of
insurance. The department of insurance exists for consumer education
and protection, and they can provide you with help and resources
to take your complaint to the next level, or find a new insurer.
You can contact your department of insurance by phone or find them
online for more information.
A knowledgeable consumer is a powerful consumer!
Finding questions to your auto insurance answers is the first step
to becoming an educated consumer--allowing you to make wise purchasing
decisions about affordable
car insurance. Find more answers to your auto insurance questions
by contacting your state department of insurance!
Megan L. Mahan is a copywriter and insurance information expert
with InsureMe in Englewood, Colorado. InsureMe links agents nationwide
with consumers shopping for insurance. Specializing in health, home,
life, long-term care and auto
insurance quotes, the InsureMe network provides thousands of
agents with insurance
leads every year. For more information, visit InsureMe.com.
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