Auto Insurance FAQs

Why does my auto insurance go up if I have an accident or get a ticket?

Accidents and traffic tickets will cause a dent in your clean slate and this will impact the premium for the auto insurance coverage applied for or if you already have one. This is because an accident or a traffic ticket means that you or your driver will move into a high risk category. Different states have different laws and depending on the state where you live, an insurance company can penalize you for the accident even after five years from the day of the accident.

Also actuarial tables indicate that drivers who have been involved in at-fault accidents are more likely to have one again.  As a result most insurance companies will use this information to charge you a higher premium based on the chances of your having another accident in the near future.

What does my auto insurance policy cover when I rent a car?

Rent a car insurance coverage will provide financial assistance but it varies from state to state and from one insurance company to another. Depending on the type of auto insurance policy you have, the insurance company will provide coverage for occasional use of the rental car for a specific liability limit valid for injuries and property damage caused by you as a driver.  If you have a collision and comprehensive coverage, then most insurers will extend the coverage to include damages caused to the rental car.

Rental car insurance generally provides the following coverage:

Collision Damage Waiver (CDW)
This will be provided by the rental agency only if your existing policy does not cover damages to a rental car. The CDW coverage will relieve you of financial responsibility if your rental car get stolen or damaged. The coverage can vary between $9 and $19 a day depending on the rental agency.

Liability Insurance
This insurance policy will provide excess liability coverage of up to $1 million for the total time period when you are driving the rental car.

Personal Accident Insurance
The Personal accident insurance provides coverage to you as well as your passengers for medical bills. It usually costs around $1 to $5 per day.

If I lend my car to a friend, is he or she covered under my insurance?

Most auto insurance policies will provide coverage for occasional sharing of cars and this includes lending it to a friend. You will have to check with your insurance agent, insurance company or your policy to be sure. Normally an insurance coverage will go with the car but if your friend injures someone while driving your car then his policy will pay first. If he/she has no insurance then your policy will become effective and provide financial assistance. It is always advisable to check with your insurance company because there are many insurance companies who will pay hold you responsible even if the car was being driven by your friend