Frequently Asked Questions about Auto Insurance

Many frequently asked questions about auto insurance keep auto insurance agents busy on the phone, in person or answering emails. Although auto insurance is something that has been around for many years, it's still very foreign and unfamiliar to many. If you have concerns and questions, don't ever be afraid to ask them of your agent. Insurance, specifically auto insurance, is around to protect you, but it can't do that if you don't understand everything there is to know about it. So, here are some of the most frequently asked questions about auto insurance.

1. If I file a claim, will my premium go up? Although all insurance companies are different, most insurance companies will not increase your premium with the first claim. However, if you have had claims in the past, your premium will undoubtedly increase.
2. If I file a claim will the insurance company cancel my policy? Although insurance companies do choose to occasionally cancel or refuse to renew policies if they consider the driver a high risk, they will consider many factors. Some of these factors are if the driver caused the accident because they were under the influence of alcohol or some other illegal substances, if there have been previous claims or if the driver has traffic violations. If none of these circumstances apply to you, chances are slim that the insurance company will cancel your policy for filing a claim.
3. What does "deductible" mean on my insurance policy? The deductible is the amount of the loss that you have to pay before the insurance company will pay their share. For instance, if your deductible is $500 and your total claim is for $2,000, you pay $500 and the insurance company will pay $1,500. Unlike a health insurance policy which has a deductible per year, the deductible amount for auto insurance policies is per occurrence. When you are a victim of an accident, you'll have to pay the deductible regardless of who's at fault. However, if the other driver is at fault and has to pay after an investigation, your deductible is usually reimbursed.
4. What is medical payments coverage? Coverage for medical payments will protect you, your covered family and passengers in a case where they require medical treatment as a result of an accident regardless of whose fault the accident was. They usually cover cost of emergency room treatment, ambulance, physicians, x-rays, surgery and funerals.
5. What is Bodily Injury Liability coverage? This coverage protects you from lawsuits when you were the driver in an accident where others were injured, either in your car or the other car involved.
6. What is no fault insurance? This type coverage pays for injuries and property damage of each driver, regardless of who was at fault.
7. What is Personal injury protection, also known as PIP? This coverage pays certain expenses for the insured person and their covered passengers or family members. Some of these expenses may be for medical and hospital, childcare, income continuation, loss of service or funeral.
8. What is uninsured or underinsured motorist coverage? This coverage will pay for damages to you and your property that were caused by a driver that does not have insurance or is underinsured.