| This article will give you some basic understanding | | | | for optional equipment not permanently installed in |
| of how car insurance works and some different | | | | the dash and for theft of items such as tapes, |
| rights and options you have when shopping for | | | | discs or other equipment designed for the |
| car insurance. You will also find some common | | | | reproduction of sound. |
| frequently asked questions regarding car | | | | What can I do to keep my auto premiums down? |
| insurance. | | | | A couple quick ways is to simply check to see if |
| In most states, you are required to carry auto | | | | you're eligible for any discounts such as claim-free, |
| liability insurance (or post a bond) and provide | | | | driver education, auto/home or multi-car. |
| proof of insurance before you can license your | | | | Ask how much you can save by increasing your |
| vehicle or renew your driver's license. If you are | | | | deductible. |
| caught driving without insurance, you may have | | | | Why Do Auto Insurance Premiums Change? |
| to pay a large fine and have your driver's license | | | | Ever wonder how insurance companies determine |
| suspended. | | | | your premium? Auto insurance premiums change |
| Most states require drivers to carry minimum | | | | for the same reasons that the price of other |
| liability coverage. In many cases, the required | | | | goods and services you buy change. |
| minimum coverage may not be enough to pay | | | | The prices of the goods and services that |
| for all the damages that result from an accident | | | | insurance companies buy affect the prices they |
| and the driver will have to pay the additional | | | | charge. Costs affecting the ultimate price of auto |
| expenses out of pocket. | | | | insurance are:o Medical costs to treat injurieso |
| What coverage's do I need? | | | | Auto repair costso Costs to adjust claimso |
| In case you're involved in an accident, auto | | | | Inflationo Uninsured drivers (your policy pays |
| insurance provides financial protection for you and | | | | when other drivers don't have auto insurance if |
| your family. It pays for the damage and injuries | | | | you purchase Uninsured Motorist coverage) |
| caused by the accident and for repairing or | | | | Although insurance companies can't directly control |
| replacing your vehicle if it is damaged or stolen. | | | | these costs, we regularly monitor them to see |
| Types of Auto Insurance Coverage's | | | | how they are affecting the costs of the claims |
| There are many different types of auto insurance | | | | we pay. As they change, auto premiums must be |
| coverage's for you to choose from.o Fault or | | | | adjusted. These costs can affect your auto |
| No-Fault - Depends on state law.o Collision - Pays | | | | insurance premium whether or not you individually |
| damages to your own vehicle.o Comprehensive - | | | | have had an accident or claim. |
| Pays for losses from fire, theft, storm, etc.o | | | | Changes you make to your auto insurance policy |
| Deductible - The amount of a covered loss you | | | | or coverage's may also change the premiums. |
| agree to pay.o Bodily Injury - Pays for injury to | | | | Adding or removing a driver, buying a new car, |
| others when you are at fault.o Property Damage | | | | moving to a new location or changing how you |
| - Pays for property damage when you are at | | | | use your car may influence the cost of your auto |
| fault.o Medical Payments- Pays for your own or | | | | insurance. |
| your passenger's medical expenses.o Personal | | | | Where do Risk Assessment Indicators come |
| Injury Protection - In no-fault states, this covers | | | | from? |
| a broad assortment of medical expenses.o | | | | Risk Assessment Indicators are based on |
| Uninsured/Underinsured Motorist - Coverage for | | | | information from consumer credit reports from |
| you if other driver is not insured or is | | | | one of two institutions: Choicepoint or Trans |
| underinsured. | | | | Union, to develop a customer's Risk Assessment |
| In addition to basic auto insurance, consider these | | | | Indicator. |
| optional services to provide added protection for | | | | Information used may include:o Length of credit |
| your vehicle:o Emergency roadside assistance and | | | | historyo Late payments, collections |
| towing serviceo Windshield glass repair serviceo | | | | What's not included in a Risk Assessment |
| Car rental reimbursement | | | | Indicator? |
| What does "full coverage" mean? | | | | Risk Assessment Indicators do not use the |
| The term full coverage generally means that the | | | | following information:o Ethnic groupo Marital |
| insurance policy has both liability coverage and | | | | Statuso Religiono Nationalityo Ageo Familial |
| coverage for damage to your vehicle. The term | | | | Statuso Incomeo Disabilityo Gendero Address |
| full coverage does not mean that everything is | | | | Can I improve my indicator and, if so, how? |
| covered no matter what happens. | | | | You can improve your indicator over time by |
| Your auto insurance policy declaration page lists | | | | using credit responsibly. A Risk Assessment |
| the coverage's you have selected. | | | | Indicator is a snapshot of your insurance risk |
| Will my policy be cancelled if I have an accident? | | | | based on information in your credit report. If you |
| Generally, being in an accident will not cause your | | | | need assistance with understanding your credit |
| policy to be canceled. However, after the facts of | | | | history or advice on using credit responsibly, you |
| the situation are reviewed, you may be required | | | | should contact a qualified credit counselor. It's also |
| to pay a higher premium for your policy upon | | | | a good idea to periodically obtain a copy of your |
| renewal. | | | | credit report from the major credit bureaus to |
| Am I covered if I drive someone else's vehicle? | | | | check for any inaccuracies. |
| Generally speaking, the insurance goes with the | | | | What if I don't get the best discount as a result |
| car. For example, if you have an accident while | | | | of my indicator? |
| driving someone else's car, the owner's insurance | | | | The Federal Fair Credit Reporting Act (FCRA) |
| would apply first toward damages. Your auto | | | | requires that insurers tell you if they take |
| insurance would generally apply in the event the | | | | adverse action based upon information contained |
| owner of the vehicle had no auto insurance or did | | | | in your credit report. They will give you the name |
| not have enough auto insurance to pay the | | | | of the credit bureau that provided the information |
| damages. | | | | and advise you of certain rights you have under |
| If I rent a car, do I have coverage? | | | | the FCRA so you can address any errors that |
| Car rental companies charge daily fees for "CDW" | | | | might appear on your credit report. |
| coverage (which means their insurance will pay | | | | What if the information in my credit report is |
| for all damages covered in your rental | | | | wrong? |
| agreement). Rental car coverage under a private | | | | If you find an error in your credit history, you |
| passenger policy varies state by state. | | | | should report the error to the credit bureau. The |
| What is Optional/Add-on Equipment coverage? | | | | credit bureau must investigate and respond to |
| Under the Comprehensive and Collision portion of | | | | your request. Once you are certain that your |
| your policy, optional equipment (a CD player for | | | | report has been updated, please contact your |
| example) is covered only if permanently installed | | | | agent. He/she will re-order a new Risk |
| in the opening of the dash where the | | | | Assessment Indicator. Make sure the information |
| manufacturer would normally install such | | | | in your credit report is correct by reviewing your |
| equipment. | | | | credit report from each credit bureau at least |
| An endorsement is available to provide coverage | | | | once a year. |