Buying Auto Insurance-The Frequently Asked Questions

Buying Auto Insurance - The Frequently Asked Questions By Brad R King

Understanding your auto insurance policy can be challenging, and for new drivers, figuring out a policy can be especially frustrating. Whether you are submitting a policy application or filing a claim, several questions can arise. And the purpose of this article is to answer some of the more common questions that come up regarding auto insurance.

How is my annual premium calculated?

Your rates are determined based on a number of factors. These factors include, but are not limited to, location, gender, age, marital status, credit, and driving history. You will submit information about yourself, and that information will be used to assess the risk level you present. To simplify, people who are more likely to file a claim pay more, while people less likely to file will pay less.

Is it possible to insure a car that is in someone else's name? Yes, you can. You must, however, have an insurable interest in the car. And in the event of a covered loss, any compensation rewarded will only go to the legal owner of the vehicle. If the car is being financed, then it just depends on the insurance company's policy. Some will require that you and the owner are both named insured on the policy, and some won't let you do it at all. In these instances, the legal owner of the vehicle should get the policy in his or her name and write you in as the principle operator of the automobile.

You cannot get insurance if you don't have an insurable interest in the property, and for good reason. If you could, that would mean that I could get insurance on your vehicle. You will need to prove that you won't gain unduly from damage to, or loss, of the insured property.

I received a quote online, but when I went to apply the rate changed. Why?

This can and does happen during the application process. It is possible that records showed something on your driver's history, or the history of another person in your household. To figure out exactly what happened, you will need to contact an insurance agent from the company you submitted your application to. If it's been a few months since you were quoted a price, the rates could have went under revision, which would raise or lower the price.

If someone borrows my car, will my insurance cover them?

Yes. If someone temporarily uses your car (with your permission) and has an accident, your liability coverage will cover the damage caused up to your policy's limit. And if you have collision coverage, that would be used to pay for damage done to your vehicle. If someone who drives your car lives in your household, then their name should be added to your insurance policy. It's best not to assume they will be covered just because they are permitted to use the vehicle and live with you.

This is just a small set of frequently asked questions by insurance customers nationwide. And if you have more specific questions about your situation that weren't answered here, don't hesitate to get help from a professional.

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