Frequently Asked Questions
What does auto insurance do?
Auto insurance protects against financial loss in the event of an accident. It is a
contract between the policyholder and the insurance company. The policyholder
agrees to pay the premium and the insurance company agrees to pay losses as
defined in the policy.
What does auto insurance provide?
Auto insurance provides property, liability and medical coverage:
- Property coverage pays for damage to, or theft of, the car.
- Liability coverage pays for the policyholder’s legal responsibility to others for bodily injury or property damage.
- Medical coverage pays for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
Do I have to purchase insurance?
State law requires drivers to be able to pay for the accidents they cause. Most people meet this
requirement by buying automobile "liability" insurance. Liability insurance pays to treat people
injured in an accident that you cause. It also pays to repair or replace the other driver´s damaged
property.
Minimum coverage might not be enough to cover your financial obligations if you cause a serious
accident. It is a good idea to consider raising your coverage limits. However, raising your
coverage limits will increase your policy premium.
Who pays to fix my car if I am in an accident?
You will need to add "collision" coverage to your policy to cover your car if it's damaged in an
accident that you caused (up to ACV limits). "Comprehensive" coverage will help repair or replace
your car if it's stolen or damaged by hail, fire, road debris, vandalism, or other similar covered
risks (up to ACV limits). State law does not require you to have comprehensive and collision
coverage. However, if you still owe money on your car, your lender will probably require you to
have this coverage. If your car is damaged in an accident caused by another driver, the other
driver's insurance will pay to fix your car, up to the other driver's policy limits.
What will happen if I don't have auto insurance?
Driving without auto insurance is against the law. A law enforcement officer will require you to
show proof that you have auto insurance during any traffic stop. Your insurance company will
provide you with an "insurance ID card" that will qualify as your proof of insurance. The card will
explain the basic features of your auto policy, including the dates the coverage begins and ends.
You should keep your insurance card with you while driving. If you are unable to show proof of
liability insurance, you could face a fine, have your vehicle impounded or you could even have your
driver license suspended.
The financial consequences of driving without insurance can be even more severe. If you cause an
accident, you will be financially liable for any resulting injuries or property damage. In the
event of a serious accident, you may have to pay tens of thousands of dollars out of your own
pocket. If you can't pay the amount you owe, you could be sued, and a court could order that the
money be deducted from your current and future earnings. In addition, it could also mean that the
person injured in the accident will have difficulty receiving the medical care necessary for a
complete recovery.
Can I get a driver's license if I don't have an auto insurance policy?
No. All applicants for a driver's license must show proof of insurance to get a driver's license.
You´ll have to show proof of insurance regardless of whether you´re getting a driver's license for
the first time, renewing your driver's license, or getting a driver's license after moving from
another state.
When do I have to show proof that I have auto insurance?
You have to show proof of insurance any time a law enforcement officer asks you for it. A law
enforcement officer will ask you for proof of insurance if you're involved in an accident,
regardless of whether you caused the accident or not. Police will also ask you for proof of
insurance if you're stopped because of a traffic violation or for any other reason. You also have
to show proof of insurance when you get or renew your driver's license, register your car and get
your car inspected.
How do companies decide what kind of risk I might pose for an accident?
Each company evaluates risk differently. All companies generally use some type of formula that
considers a variety of "risk factors." These factors generally include driving history, age,
gender, and marital status, and in some cases insurance credit score.
Can I buy insurance at a car dealership?
No. Insurance may only be sold by an insurance agent or broker licensed by the Department of
Insurance.