Have your question or comment appear below!

Auto Insurance Answers

Question: Why is auto insurance so expensive?

Car insurance costs so much because of a combination of things; Auto insurance fraud, lobbying by the auto insurance industry, and only about 50% of drivers actually auto insurance coverage. Since only half of drivers on the road (licensed and not) actually pay for coverage, they have to compensate of all the uninsured.

Question: Is insurance primarily on me or the car?

In most States, the insurance on the vehicle is primary. If liability insurance on the vehicle is inadequate your own policy will come in as secondary and protect you as a driver / owner.

Question: Can I get auto insurance with a learner's permit?

Yes, a learners permit is permission to drive and so it's a temporary, restricted license. You can obtain your own insurance or you can be covered under another policy, but you must be insured. A drivers permit comes with all the responsibilities of anyone who drives a vehicle on public roads, including financial responsibility. Most likely you will be included on your parents policy, or you must be specifically excluded.

Question: Can I buy non owner auto insurance?

You can purchase non-owner auto insurance from many insurance companies that issue non-standard policies, and a few national carriers. You may also try your State's assigned risk plan. You may also be able to get non auto car insurance through purchase of an umbrella policy. If you are self employed you may also be able to purchase a commercial liability policy with an option to add non-owned auto coverage. Remember there are still minimum liability limits for each State.

Question: What should my liability coverage limits be?

You have to balance how much you could afford to pay for in an accident over and above your coverage limits. If you have much liquid or loan able wealth, maybe you be fine with lower limits. But then again, you could afford good coverage!

The higher your liability coverage limits are, the more likely your policy will be able to pay all of the damages. So the answer really is "as much as you can afford to maintain?"

Question: Should I carry collision & comprehensive coverage?

The finance company will insist You have collision or comprehensive coverage if your car is leased or financed. Once you have paid off your car, and over time as its value decreases, you might consider dropping these coverages to lower your premiums.

Calculate the savings from dropping these parts of your insurance plan and if that would be worth paying the entire cost of repairing or getting a new car.

Question: What kind of deductibles should you have on collision and comprehensive coverages?

Higher deductibles lower your premium (slightly) but increase the amount you must pay out of your own pocket if a loss occurs.

If you are a safe driver (childless, non drinker, few distractions, cord less cell phone, etc.) you may want higher deductibles.

If you have many distractions (kids) and drive many short trips, your exposure is higher to small fender benders where you would be subject to more of the deductible.

Question: Should you get uninsured/underinsured motorist coverage?

This is a way easy one. Yes! If you don't have UM/UIM coverage and are hit by an uninsured motorist, your only option is to pursue the driver in civil court or small claims court.

Go back to How much auto insurance do you need?

Written by Craig J. Casey

Financial Writer helping people with their insurance problems on the net since 1998.

blog comments powered by Disqus