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Young Driver’s - Car or SUV Insurance FAQ – Part II


6. When do I have to show proof that I have auto insurance?

You have to give evidence of insurance any time when asked by a law enforcement police officer. A police official will ask you for the confirmation of insurance if you´re caught up in an accident, not considering if you caused the accident or not. Police will also ask you for verification of insurance if you´re stopped due to a traffic violation or for any other reason. You also have to give evidence for insurance when you get or renew your driver´s license, register your car, and get your car inspected.

7. How are auto insurance rates determined?

Generally, companies support their rates on their estimation of the probability that you will be caught up in an accident. Figures show that younger drivers are expected to be caught up in accidents than older or more experienced drivers. As a result, charges for younger drivers will generally be more costly. If you include collision and comprehensive coverage on your policy, the type of car you drive will also have an effect on your rates. Luxurious and expensive cars or SUVs are built for high speed which very expensive to insure. Similarly, cars with security or anti-theft systems are generally less expensive to insure.

Every auto insurance provider has its own technique for determining your likelihood. It is doubtful that any two companies will estimate your risk to be the same or offer you the same rate. Several companies may decide that you´re too great a risk and refuse to sell you a policy. If that happens, keep shopping. Since companies calculate risk differently, you may be able to find another company willing to insure you. Rates can vary greatly from one company to the next, so shopping around can also help save you money.

8. How do companies decide what kind of risk I might pose for an accident?

Every auto insurance company evaluates risk differently. All agencies usually make use of some sort of formula that considers a variety of “risk factors.” These factors include:

• Driving history: One of the most significant pointers of the way you will drive in the future is the way you´ve driven in the past. If you´ve formerly caused an accident, an auto insurance company might reasonably assume that you could cause another accident in the future. Providers also will think about if you´ve gotten any speeding tickets or other moving violation. If you have accidents or tickets on your driving record, you will pay more for auto insurance. If you have several accidents or tickets, few companies may refuse to sell you a policy.

• Age: Figures show that young, inexperienced drivers are more likely to cause accidents. Consequently, younger drivers, particularly teenagers, pay higher charges for auto insurance. Insurance rates for good drivers usually drop significantly after age 25.

• Gender: At younger ages, male drivers are expected to be caught up in a car or SUV accident than female drivers are. Therefore, younger male drivers are liable to pay higher rates. After age 30, the accident risk of male and female drivers is usually considered equal.

• Lifestyle: People who are married or have children are likely to be concerned in fewer auto accidents and usually pay lower rates in comparison to young driver’s insurance.

• Credit history: figures illustrate that drivers with poor credit histories have a tendency to comprise more accident claims than drivers with good credit. Many, but not all, coverers use credit scores to help them decide a driver´s accident risk. If you haven´t had time to develop a credit history because of your age, insurance companies generally won´t count your lack of history against you. Nevertheless, most companies will judge your credit history in the future when you renew a policy or change insurance agencies. Thus, continuing and maintaining a good credit history by paying your bills on time and avoiding surplus debt can effect in lower auto insurance rates.

9. What is the average monthly auto insurance premium?

Your premium will differ according to your individual conditions. Thus, it is unattainable to list a meaningful average premium. To get an idea of what you can look forward to pay for car or SUV insurance, view our Automobile Insurance Price Comparisons. Evaluate the price estimates for the driver summary that matches your circumstances.

10. How can I lower my premium?

The best way to lower your premium is to be a safe driver. Companies offer the finest rates to drivers with no car or SUV accidents, speeding tickets, and other traffic violations.

Here are some other tips to help you save money:

• Ask about discounts: Insurers often offer concessions to customers who meet certain standards. For instance, some companies may offer discounts if you make good grades in school or drive a car with safety and anti-theft features. Ask your auto insurance agent whether they offer discounts and if you are eligible.

• Drive a safe vehicle: Insurance charges are higher for convertibles and sports cars as they are likely to be driven at higher speeds and often provide occupants with less protection than other types of cars. Driving a car with safety features such as anti-lock brakes and air bags will likely lower your premium.

• Consider higher deductibles: Your deductible is the total amount you must disburse from your own pocket prior to the insurance company will pay. For instance, if your policy has a $250 deductible, and you cause a wreck that results in $1,000 in damages, you´ll have to pay $250, and then your insurance company will pay the remaining $750. Policies with higher deductibles have a tendency to be reasonably priced as the company will pay a smaller share of any loss. But keep in mind; even though your premiums will be lower if you raise your deductible, you´ll have to pay more out-of-pocket if you have a claim.

11. Can I buy auto insurance at a car or SUV dealership?

No. In US, insurance possibly will just be sold by an insurance agent or broker licensed by the National Association of Insurance Commissioners (NAIC).

12. If I have an accident while driving a friend´s car, will my policy pay? What if my friend has a wreck while driving my car?

In most cases, the vehicle owner´s insurance pays for losses, regardless of who was driving. This means that if you´re in wreck while driving a friend´s car, your friend´s policy will usually pay. If you have an auto policy, your insurance would pay any remaining total amount that surpasses your friend´s policy limits. If your friend does not have auto insurance and you´re involved in an accident while driving his or her car, your policy will pay. Similarly, if a friend has an accident while driving your car, your policy will pay first, and your friend´s policy will pay any outstanding amount that goes above your policy limits. If you do not have insurance and your friend is caught up in an auto accident while driving your car, your friend´s policy will compensate.

13. If I get in a wreck and the total damage is higher than my policy´s dollar limits, will the insurance company still cover me?

The insurance company will only pay up to the amount of your policy´s dollar limit. This means that if your policy´s property damage limit is $15,000, the company will only pay $15,000 to fix the other driver´s car. You will have to pay the rest yourself. The lowest amount liability coverage requirements may not be sufficient to meet your monetary responsibility if you´re caught up in a serious wreck. It´s a great idea to think about buying a policy with more than the least required coverage limits.

14. Can a company cancel or refuse to renew my policy if I get a speeding ticket?

Yes. Companies will consider your driving record, including any wrecks you´ve caused and tickets you´ve gotten, to decide whether to issue you a policy. Most insurers regularly ensure the state database of traffic certification to confirm that their policyholders have not received any unreported records.

An insurer may cancel your auto insurance policy within 60 days of your initial purchase for any reason. Therefore, if you get a ticket within this timeframe, your insurer could decide to cancel your coverage. After 60 days, your insurer generally may not cancel your coverage unless you failed to pay your premium or committed insurance fraud. However, your insurer could decline to renew your coverage if you received a ticket during the previous policy term.

Most companies generally won´t cancel or refuse to renew your policy for a single ticket. You can expect the company to raise your rates when your policy is renewed, however. Receiving numerous tickets considerably boosts up your probability that a company will choose not to renew your policy when it expires.

If you´re convicted of driving under the influence (DUI) or driving while intoxicated (DWI), you can expect to pay significantly higher rates. These convictions can as well cause your coverer to refuse to renew your coverage. Most insurers consider your driving record for the previous three years. Companies generally judge any DUI or DWI convictions you received in the previous five to seven years.

Most police jurisdictions in US will allow you to take a certified, six-hour defensive driving course to remove tickets from your driving record. Generally, you can only take defensive driving once a year to remove one ticket. You may not take defensive driving to remove tickets for DUI, DWI, or for speeding more than 25 miles per hour the posted limit. You must pay to take the course. Nonetheless, taking self-protective driving may eliminate or lessen the fine.

15. What if I can´t find a company that will sell me insurance?

If an insurer turns you down or decline to renew your coverage, keep shopping. Companies use different methods to determine your risk. Several companies may be keen to insure you, although other companies have turned you down.

You may want to shop with an independent insurance agent. Independent agents usually represent multiple companies. This can help you save time as you can find out about quite a few companies with one call, rather than calling each company separately.

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