Frequently Asked Questions about Auto Insurance

Find answers here to frequently asked questions about auto insurance and what it means to you.

How much liability insurance do I have to have?

Different states have different laws determining the level of insurance required. Some states mandate as little as 10/20/10 (ten-thousand for injury to one person, twenty-thousand for injury to more than one person and ten-thousand for property damage), while others mandate much more for minimal levels of insurance coverage. Check with your state department of motor vehicles for more information on how much insurance is required in your state.

What is GAP Insurance?

GAP insurance is a type of insurance not offered by most insurance carriers, rather it is usually offered by car dealerships or auto lenders. The purpose of GAP insurance is to pay the difference between what the car's value is (what your collision insurance will pay) and what you owe on any loan after an accident. The absence of this type of insurance often leads people having to continue to pay out of pocket for a vehicle that was totaled in an accident and they no longer drive because the car insurance only paid what the car was worth�not how much was owed, and they were upside-down in their car loan.

Which types of insurance are required by law?

All states require some level of liability insurance at a minimum. Some states require additional insurance as well such as personal injury protection (PIP) and no-fault insurance coverage as well. Contact your state's department of motor vehicles for more information on which insurances are required.

Why are teenagers more expensive to insure?

The lament of parents all across the country sooner or later. The simple truth is that teenagers are more expensive to insure because statistically they're much, much, much more likely to get into or cause a auto accident than people in other age groups. This high level of risk is compensated for by insurance companies by charging them (or their parents) more in order to provide coverage.

What if the damage from my accident exceeds my insurance coverage?

You may be made civilly liable for any damages beyond what your insurance coverage provides for. This is why it is important - especially if you are a homeowner - to have enough coverage and not settle for the minimal levels that you can buy. With the rising cost of medical treatment and newer technologies in cars making them more expensive, you do not want to find yourself in the position of having to pay someone else's expenses out of pocket after dealing with the trauma of an automobile accident.