Learning About Car Insurance

Car insurance can be confusing and knowing a little bit about policies and coverage is helpful. Of course, some people are content to feel secure that they are protected by a car insurance policy and don't want to know the details. Most individuals, however, want to be more informed and are asking questions about car insurance. Here are a few common questions and answers about car insurance that can give you a head start to learning more.

If I have a car accident, and it wasn't my fault, will my premium go up?

Generally, if you have an accident and weren't at fault, your premium should stay the same. Frequent claims to your insurance because of car accidents will make your premiums increase. Insurance companies like drivers that are safe on the road, and if they think you may be a reckless or risky driver, the insurance companies will charge you higher premiums.

Do teenagers affect the premiums of my car insurance?

Teenagers are in a group that tends to increase car insurance premiums quite a bit. After all, teens are just beginning their driving experience and are in a high-risk group for accidents. Insurance companies prefer drivers who have proven to be safe and responsible behind the wheel. Expect to pay more for your policy if you include a teen.

Is sharing a car insurance policy a good idea?

Sharing a policy can be a good idea for some couples, as you'll only pay one premium instead of two. However, if one of you has a poor driving record or has many past insurance claims, it may be best to take two separate policies. One person may have higher premiums but the other person's premiums will be lower and the two will even out or even be less expensive than sharing an insurance policy.

I'm planning on taking my car on a trip. Will I be covered by my car insurance policy?

That depends where you're traveling to. If you're taking a trip to Canada on pleasure or business, your American policy covers you. If you're thinking of going to Mexico, though, it might be a good idea to get a temporary insurance coverage from Mexico. If you're traveling within the United States, you shouldn't have any problems at all.

What type of insurance coverage do I need for my car?

That depends on your needs. A good rule of thumb for car insurance coverage is that if you don't own your car outright, you should make sure that your vehicle is completely covered with collision coverage for full repair or replacement in case of accident. Otherwise, you could easily end up making loan payments on a stolen car while having to take out a new loan to buy a replacement vehicle. Comprehensive coverage will cover expenses in the case of a theft, a fire, or a flood. Liability coverage will cover costs if you're at fault in an accident and have damaged another person's vehicle. Liability coverage will also cover the other person's medical expenses or loss of wages related to the accident.