Auto Insurance FAQs
Q: I have an older car that currently has a very low market value. Do I really need to purchase automobile insurance?
A: Most states have insurance laws that require drivers to have at least some automobile liability insurance. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent.
It is often the case that the cost of repairing the damages to an older car is greater than its value. In these cases, your insurer will usually just “total” the car and give you a check for the car’s market value less the deductible. Many people with older cars decide not to purchase any physical damage coverage.
Q: What’s the difference between Collision Physical Damage Coverage and Comprehensive Physical Damage Coverage?
A: Collision Physical Damage Coverage is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.
Comprehensive Physical Damage Coverage provides coverage for most other direct physical damage losses you could incur, including theft. For example, damage to your car from a hailstorm will be covered under your comprehensive coverage.
Q: What factors can affect the cost of my automobile insurance?
A: A number of factors can affect the cost of your automobile insurance, some of which you can control and some that you can’t.
The type of car you drive, the purpose the car serves, your driving record, and where the car is garaged can all affect how much your automobile insurance will cost.