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Common
Questions About Auto Insurance
- What is insurance?
Insurance is a way of spreading financial risks among large
numbers of people. You pay a fee (premium) to an insurance company
for the right to share in funds set aside to pay your costs
in certain pre-defined circumstances.
- Do I have to buy Auto Insurance?
Most states require you to carry a minimum amount of liability
coverage in your automobile insurance policy. Many states have
"no-fault" auto insurance systems; in other states,
coverage for medical costs for you and your passengers is optional.
Coverage for damage to your car is optional.
- How much will my insurance cost?
Prices vary widely. The type of car you drive, your
driving record, your age, your sex, where you live and how much
you drive usually affect cost. You may also qualify for various
discounts.
- Can I be added on to my parents'
Auto Insurance?
If you drive a family car, you can be added to your parents'
policy. However, the cost of the policy will increase. (Some
companies insure young drivers only on a family policy.) If
you have your own car, your parents' company may sell
you a separate policy but at a different rate than your parents.
New drivers seeking their own insurance frequently are referred
to state-run insurance pools, known as "assigned risk plans,"
where the cost of insurance is higher.
- Do I have to be a certain age to
buy my own insurance?
No. However, you must have a valid driver's license. Also,
in many states you must be 18 before you can own a car without
an adult's name on the auto registration.
- How often do I have to renew my insurance?
Auto insurance policies usually last six months. Some last
one year. You will receive a notice when it is time to renew
your insurance.
- Will my rates go up or will I lose
my insurance if I get into an accident or get a ticket?
If you are not at fault in an accident, your insurance should
not be affected. If you are at fault, get a ticket for a serious
violation (such as drunk driving), or are involved in an expensive
property damage claim (such as crashing into a tree), the company
will consider that when setting the price for your next insurance
policy. Your rates for the current policy won't be affected.
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