1. What does it mean by laws regarding “car financial responsibility?”

These are state laws that require you to bear responsibility for injuries and property damage that occurs while you are driving and at fault.

2. What if I chose to drive my vehicle uninsured?

In most states it is mandatory to purchase liability coverage. The only exception to this would be if you resided in either, Wisconsin or New Hampshire. Refusal to buy insurance coverage may result in fines, loss of license or possibly a jail sentence.

3. Will my policy cover anyone who drives my vehicle?

Yes, if that driver has your permission to be using the vehicle. Be clear about your policy. Your insurance company may require that anyone who resides with you and holds a license, be named on your policy. If that is the case and someone living with you drives your vehicle and is not on your policy, they won’t be covered.

4. What are the recommended liability limits? (Auto Insurance FAQ #1)

It is generally agreed among insurance agents that state minimums are not sufficient. The suggested minimum is 100:300:100. Namely:

o $100,000 for bodily injury per person
o $300,000 for bodily injury per accident
o $100,000 for property damage per accident

The bodily injury guidelines apply for all states, as medical costs don’t vary much from state to state. But, property values do vary considerably on an area by area basis. Think about increasing your property damage limit, if you drive regularly in areas where real estate prices are exceptionally high.

5. Do newly licensed teenagers need insurance?

Yes, they need to be covered. They should have their own policy or be named on the policy of an insured person with whom they are living. In most cases, that insured person would be a parent or guardian.

6. What guidelines do insurance companies follow in deciding to renew or cancel a policy?

They evaluate whether a policy holder is a “worthwhile risk.” In doing this, they look at his/her driving record, credit history and how many claims the policy holder has filed…and possibly, other factors depending on the insurance company. If all of these are squeaky clean, you don’t have anything to be concerned about!

Joe Goodman is the creator of Car Insurance Performance [http://carinsuranceperformance.com].com an info-rich website that discusses how to find auto insurance that is right for you & your car…at the fairest possible price. For more detailed info on auto insurance for students, visit us on the web at Auto Insurance FAQ [http://carinsuranceperformance.com/auto-insurance-faq/].

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