Jonathan on July 20th, 2010

Can you answer certain questions about your automobile insurance policy? Do you have “full coverage”? What does that term actually mean? If you wreck your buddy’s car, will your auto insurance policy pay to have it fixed? Does your credit score have an effect on the cost of your policy premiums? Many drivers don’t know the answers to these questions and others. Before requesting your next auto insurance quote read the following FAQs and be better prepared to discuss your needs with an agent.

Q: If I purchase a “full coverage” automobile insurance policy, am I totally covered if I get into an accident?

A: Not necessarily. The term “full coverage” simply means that your policy has liability coverage and coverage for damage to your automobile. What is covered – and at what level – varies by auto insurance policy.

Q: Does my auto insurance policy cover me if I am driving someone else’s car?

A: Your automobile insurance policy covers your car, in most instances. If the owner of the car you were driving does not have adequate auto insurance or no insurance at all, your policy could kick in to cover damages. This varies by policy, so be sure to ask this question to the agent providing your auto insurance quote.

Q: Does my auto insurance policy cover my newly installed CD player?

A: Yes. Policies cover optional equipment if it is permanently installed where the manufacturer would have installed it.

Q: Does the kind of car I drive affect the cost of my automobile insurance policy premiums?

A: Yes. Insurance companies factor vehicle loss history – how often the make and model gets stolen, how much it costs to repair – into their determination of policy premiums. For example, Ford Explorers are frequently stolen because they share a number of parts with other Ford products, and therefore might cost more to insure.

Q: Will my auto insurance policy be cancelled if I get into an accident?

A: In most instances, no, but your policy premiums might go up come renewal time if the accident was your fault. If that happens, you might want to request an auto insurance quote from another company.

Q: What discounts are available for automobile insurance policies?

A: This varies by company, but most offer discounts for having an accident-free record, for multiple policies (auto insurance and home insurance) and more than one car insured with the company. Some auto insurance companies also offer alternative-fuel discounts to those who drive hybrids.

Q: Does my credit score affect my auto insurance premium costs?

A: Yes. Automobile insurance policy underwriters use credit report information, motor vehicle records and loss reports to determine premium costs. The following factors are never used to determine cost: ethnic group, marital status, religion, nationality, age, familial status, income, disability, gender or address.

Armed with the answers to these automobile insurance FAQs, you are now ready to request and discuss an auto insurance quote with an agent.

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