Frequently Asked Questions About Auto Insurance
- What is the difference between collision and comprehensive coverage?
- Should I buy comprehensive coverage if I have an older car?
- How much car insurance coverage should I carry?
- What is liability coverage and how much should I have?
- Can I drive without auto insurance?
1. What is the difference between collision and comprehensive coverage?
Collision coverage helps pay for damage to your vehicle that is caused by:
- Collision with another vehicle
- Collision with a stationary object, such as a tree or street sign
- A vehicle rollover
While subject to deductibles, this type of coverage protects you whether or not the damage is your fault. You may be required to have collision coverage if your vehicle is being financed or leased.
Comprehensive coverage, or Other Than Collision coverage, helps pay for loss or damage that is not caused by a collision, object or vehicle rollover. This includes damage caused by:
- Theft or vandalism
- Fire, blizzards, hail or wind
- Falling objects, such as a rock or tree
While subject to deductibles, this type of coverage protects you in situations that don’t necessarily involve other drivers or vehicles. As with collision coverage, if you are leasing or financing your car, comprehensive coverage may be required.
2. Should I buy comprehensive coverage if I have an older car?
The answer is – it depends.
Since the comprehensive coverage benefit is usually limited to the cash value of your vehicle, one way to lower auto insurance premiums is to raise the deductible or not carry comprehensive coverage on an older car. Why carry comprehensive coverage with a low deductible if you are not concerned about minor cosmetic damage to your vehicle? If your vehicle is not looking brand new, is paid for, and may be providing its last few good miles, then not buying comprehensive coverage might be a good way to save some money on your insurance.
Remember – if you drop comprehensive (or collision) coverage, you are responsible for the full cost of repairs or replacement. So balance the option of lower car insurance premiums with your ability to pay out-of-pocket for uncovered expenses.
Need help deciding?
Check with your National General Insurance representative or your agent or broker, to make sure your collision coverage meets your needs.
3. How much car insurance coverage should I carry?
Determining the amount of auto insurance coverage you need means considering a number of factors.
The state you live in has a lot to do with the coverage you’ll need. Most states require liability coverage at a minimum. Be sure to find out your state’s auto insurance requirements before choosing your coverage. Check with your local Department, or Registry, of Motor Vehicles or your National General Insurance representative, agent or broker for more details.
The type of vehicle you drive influences the type of insurance coverage you might consider purchasing. For example, large SUVs have been shown to cause more damage in accidents. That means the amount of property damage liability coverage you might need, even in an accident at a low speed, is higher than if you drive a smaller car.
Leased or Financed Vehicles
If you’re looking to insure a leased or financed vehicle, you will likely be required to carry collision and comprehensive coverage. Since you are still paying for the automobile, or may not choose to take ownership of it at the end of the lease period, the lender or the leasing company will likely require you to have these coverages to protect their investment. When you’ve paid off your car, you can lower your auto insurance premiums if you drop collision or comprehensive, or you can always consider carrying a higher deductible to lower your premium.
A higher deductible can lower your auto insurance costs in the short-run. But choose your deductible keeping in mind the amount of money you’re comfortable paying out-of-pocket in case of accident or other loss.
Before you choose lower auto insurance coverage limits, consider your financial situation. Lower coverage limits may cost you less now, but in the case of an accident, will you have the ability to pay for damages that go over your insurance coverage limits? If not, consider higher limits. In the long run, it could be the best choice for you.
Not sure which drivers to list on your auto insurance?
In general, licensed drivers who live in your household or anyone who could even drive your car should be listed on your auto insurance policy. That way, in case of accident or damage, you’re covered. Those living in your household who will never drive your vehicles can generally be excluded from your insurance policy to save on auto insurance premiums.
4. What is liability coverage and how much should I have?
Nearly every state requires you to carry a minimum amount of liability coverage as part of your auto insurance policy. Liability coverage pays for injury or property damage to others.
There are two types of liability coverage:
- Bodily Injury Liability coverage protects you if you injure someone or cause a fatality with your car.
- Property Damage Liability coverage protects you if your car damages someone else’s property.
How much liability coverage should you choose?
In general, higher levels of insurance coverage mean higher premiums. But they also mean a greater likelihood that insurance will cover all the costs of an accident.
Since insurance companies provide coverage up to specified limits (for example $25,000 or $100,000), be sure to factor your personal finances into your decision. If you want extra protection in case of a lawsuit or you drive a vehicle known to cause more damage like an SUV, then you might want a higher level of liability coverage.
A good rule of thumb is to choose liability coverages and deductibles that take into account your personal financial situation, the type of car you drive and how much risk you are comfortable with.
In some states known as "No-Fault" states, you may be required to carry Personal Injury Protection coverage and this may impact your selection of the above coverages. More information about this coverage is available in our online quote process. Or for more details, your National General Insurance representative or agent will be happy to help.
5. Can I drive without auto insurance?
Driving uninsured is not smart. Even the minimum auto insurance coverages required by your state can safeguard you against many financial risks.
Here are the general rules for when and where you need auto insurance.
- If you drive a car, you probably need auto insurance. While some states may allow you to prove financial responsibility or pay a uninsured driver fee, in most states you are required to have insurance.
- In most states, if you drive your vehicle without auto insurance, you risk citations, fines, revocation of your driver’s license, significant financial losses and even prison! Your insurance rates may even go up.
- Without an insurance company to protect you, if you’re driving uninsured and you cause an accident, you may be personally responsible for damages that could run you tens of thousands of dollars or more.
- Likewise, without auto insurance, if your car is stolen or damaged, you are responsible for the full cost of repairs or replacement!
- While state laws vary as to the minimum auto insurance coverage you need, you should protect yourself in the event of an accident or other damage to your car. And remember – auto insurance applies to the vehicle, so if you’re borrowing a car, be sure it’s insured and that the proof of insurance and registration are in it!
So check with your local Department of Motor Vehicles or your National General Insurance representative agent or broker, for the best car insurance options for you and your family.
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