Car insurance FAQ
Why is car insurance mandatory?
Car insurance is mandatory in most states because it is used as a proof of financial abilities to cover the costs of liability towards third parties after an accident has taken place. In some states it is even impossible to register a car without providing a valid car insurance policy first. Car insurance is a legal requirement, which can result in fine, license suspension or time in custody if not met.
What kinds of coverage are a must?
As you may already know, car insurance consists of various types of coverage that can be included and adjusted in their amounts. The only legally required coverage is the third party liability, which consists of bodily injury and property damage. Each state has specific minimum amounts of this coverage the policy should meet in order to be valid. However, if you're financing your car through a loan in most cases you will be also obliged to purchase collision and comprehensive coverage by your lending institution.
Will my credit rating affect insurance quotes?
In most cases, yes. The majority of insurance companies use a client's credit rating when determining the rates. It is done because there is a statistical link between a person's credit score and the likelihood of filing a claim. People with poor credit rates file claims more often than those who have better scores. Still, not all companies use credit scores so you may end up with a car insurance provider that won't mind your credit score at all.
What are the main factors determining my rates?
There's a long list of factors that will determine your rates. Some of them are more important than the others, yet this varies from company to company. Things like car make and model, engine power, top speed, safety features, your credit rating, driving record, marital status, place of residence, early mileage, educations and others will al contribute to the car insurance rates you'll be charged with.
How can I get better car insurance quotes?
The best way to get car insurance quotes is to shop around. You can do this either by speaking to your insurance agent or broker, or getting quotes online. The second option is more convenient and effective since you have more freedom in choosing the provider you like and you can do it at home or at the office.
Car Insurance FAQ
- Why is car insurance mandatory?
- What kinds of coverage are a must?
- Will my credit rating affect insurance quotes?
- What are the main factors determining my rates?
- How can I get better car insurance quotes?
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