Common Questions

What You Should Know About: Auto Insurance

We have answers to your questions about auto insurance

What is auto insurance?
Insurance is a way of spreading financial risks among large numbers of people. In the case of auto insurance, you pay a fee (premium) to an insurance company in return for the right to share in funds set aside by your insurer to pay your costs in specific (covered by your policy) circumstances, such as an auto accident.

Do I have to buy auto insurance?
Most state laws require you to carry a minimum amount of liability coverage to operate a motor vehicle (to pay for injuries or damages you may cause to others in an accident). And in Oregon, your policy must include “Medical Pay” coverage, to pay for injuries to you or passengers in your car. “Med Pay” coverage is optional in Washington and Idaho, and there are other coverage options you should consider also, to help pay for damage to your own vehicle, or to pay for “hit and run” or uninsured driver accidents, for example.

Do I need “optional” coverages?
Keep in mind, while only liability coverage (and in Oregon, Med Pay) is required by law in the Northwest states, it won’t pay to fix or replace your own lost, stolen or damaged vehicle – or pay for injuries you or your passenger suffer in an accident – regardless of fault. Experts say 13-16% of drivers on our roadways are uninsured. If you’re hit by one and have no coverage, can you afford to fix or replace your vehicle without insurance?

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 buy “more” insurance coverage?
Yes. While the law requires “minimum limits” for all vehicle operators, many drivers choose to buy coverage that includes higher limits – like up to $250,000 instead of $50,000 – to protect their personal assets if they cause an accident. Need even more coverage? Consider an umbrella policy, which provides higher amounts of coverage (starting at $1 million or more) after the initial policy limits are reached.

How can I save money on auto insurance?
The place to start is with a conversation with your insurance agent or company. Make sure you’re getting the discounts you’re entitled to. Safe driver? Student with good grades? Willing to take a safer driving course? Also, ask about increasing your deductible on your optional auto policies. That’s more out-of-pocket if you have a claim, but more IN your pocket when you pay your premium.

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 on a family policy only.) 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 may be higher.

Do I have to be a minimum 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 renew my insurance?
Auto insurance policies usually renew after six months. Some last one full year. You will receive a notice when it is time to renew your insurance (this typically occurs automatically).

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 involving another vehicle, your insurance likely will not be affected. If you are at fault, are cited for a serious violation (such as driving under the influence of drugs/alcohol), or you are involved in an expensive property damage claim (such as crashing into a tree), your insurer will consider that when setting the price for your next insurance policy, and you may see changes to your rates, either as a premium increase or temporary surcharge. Your rates for the current policy won't be affected.

Auto Q&A Fact Sheet