Just the FAQs: Common Car Insurance Questions Answered

By Jessica Bosari
After 13 years in personal and commercial insurance, Jessica Bosari now writes about personal finance, car insurance, risk management and related topics. Since 2008, she has been simplifying complex ideas through engaging articles for her readers.

Just the FAQs: Common Car Insurance Questions Answered

Some car insurance questions come up again and again. Some of those are just easy-to-forget details you only need once in a while. Others stick around because customers just can’t believe the answer and patiently wait for a different one. Not everything about car insurance makes sense. I’m here to help you with those hard-to-recall details and shake my head with you over some of those oddball car insurance situations that baffle you.

I’m moving to a new state. How much car insurance do I need?

Every state requires liability insurance, New Hampshire excepted (but most NH residents carry it anyway). Some states require Property Damage, Personal Injury Protection, Medical Payments coverage and Uninsured Motorists’ coverage as well. And remember that if you have a loan on your car, the lender will require collision and comprehensive coverage to protect their interests.

It’s sometimes possible to opt out of certain ‘required’ coverages. In Virginia, you can opt out of everything for a $500 fee (NOT recommended). Check out my article on minimum required coverage for a thorough explanation and a chart that shows all the different types of insurance coverage required in each state. And what about those minimums? How do you know when minimum coverage is enough to protect you financially? In general, when deciding your coverage limits you should consider how much you can afford to pay out-of-pocket if an accident happens.

Why did my car insurance bill go up?

Of all car insurance questions, this one makes me suck in my breath, pause and proceed slowly. Because when this question comes up, it’s because somebody is not happy. Car insurance rates can go up for a small number of reasons. The first step is to see if an accident, surcharge or ticket caused rates to go up. If not, it’s time to check with the state insurance department to see if there was a mandated rate increase for all drivers.

When it’s not the first reason, it’s usually the second. Outside of those two explanations, somebody may have made a mistake on the policy information in the insurance company’s computer system. As an insurance professional, I have to go through all the information on the policy and application to confirm we have the right information. And sometimes, God help me, I still can’t find a good reason. The only thing I can do at that point is empathize and escalate the question to a supervisor who will continue the investigation.

How can I save on my car insurance premium?

When rates go up, it’s natural for an insured to ask about ways to bring it back down. Usually, the answer is to retire the extra clunker they keep around in case the primary car breaks down. It’s much cheaper to get Towing and Labor coverage with a Rental coverage endorsement than to insure a whole extra car. They also save on excise taxes by getting rid of the extra car.

Saving money is important, but I’m not going to tell you to move to a new town or get a car that’s cheaper to insure. I hate that kind of advice. They seem like drastic measures to save a few bucks on your car insurance. Insurance discounts are a convenient way to save money with what you already have, but they often go unnoticed. Discounts are a great place to look for savings when other measures aren’t feasible. Check out this article on car insurance discounts for more information.

Does the insurance company that gave me a quote have good customer service?

No doubt about it–customer service is a really important part of car insurance. If you can’t get the help you need with billing or if an accident happens, you’re in for headaches. You can find information about car insurance companies from several sources, such as the National Association of Insurance Commissioners, local forums like city-data, consumer websites, friends and family. Use this detailed guide to car insurance company reviews to get all the details.

Which discounts offer the biggest savings?

Insurance discounts can save you a lot, or they can save you just a little. A select few are really worth your time to check on. They include discounts for safe driving, passive restraint systems, newer cars, students who attend school away from home (distant student discount), multiple cars and good students. You can get a better handle on how much these discounts can save you here.

What is the difference between Personal Injury Protection and Medical Payments coverage?

Personal Injury Protection (PIP) applies in states with “no-fault” laws. PIP coverage ensures that no matter who is at fault for the accident, your medical bills (and several other types of expenses) resulting from the accident will be paid. PIP covers you, your passengers, pedestrians and bicyclists. The slightly different Medical Payments coverage, or MedPay, covers you and your passengers for medical bills related to an accident. The availability of either type of insurance depends on the laws in your state.

My child is a driver on my policy. Will she be covered while driving another person’s car?

Anyone listed on your policy, related to you by blood or marriage, is covered while driving another car. Typically, the insurance on the other car pays first ,and your policy becomes excess insurance for any resulting accidents.

Does insurance follow the car or the driver?

This is a complicated topic, and both can be true. Generally, insurance follows the car. But when there are problems with coverage, it may follow the driver instead. For instance, if you drive a friend’s car and it has no insurance, your insurance follows you. If you drive your friend’s car that has proper insurance, the friend’s insurance pays first and your policy serves as excess or backup insurance, if it has higher limits. It all depends on the various policies in play, the type of coverage you’re asking about, the accident itself, the state where it occurred and the driver listed on the policy.

What information will I have to provide to get an online auto quote?

Usually, you’ll need your driver’s license information, details about your car’s options, and its mileage. It’s also a good idea to keep your current policy handy for reference to help you choose the correct coverage limits.

Will my payment be on time if I mail it on the due date?

With most insurance companies, as long as the payment envelope is postmarked by the due date, your payment is considered on time.

Why did my rate change after I received a quote?

Assuming there isn’t a big gap between when you were quoted and when you’re receiving the policy, the difference is probably due to information that came up which was not available at the time you received the quote. It could be in issue related to the driving records of one of your listed drivers or any number of rating factors. Call your insurance agent or company to find out what happened before you send in your first payment.

How fast does a policy change go into effect?

You must speak to a live person or submit a completed form online to create policy changes, and they are effective as soon as you do so. Leaving a voice mail for your agent is not sufficient. Usually, you’ll need to sign a form to make the change stick.