Auto Insurance FAQs

I have an older car whose current market value is very low – 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. We counsel clients to consider whether they could afford to replace their car on their own if it were wrecked. If not, it may be worth paying a little extra to buy comprehensive and collision coverage in order to have assurance that if your car is destroyed there will be an insurance check available to replace it.

What is the difference between collision physical damage coverage and comprehensive physical damage coverage?

A: Collision 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 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. Flooding, fire, vandalism, and glass breakage are other examples of covered losses under comprehensive coverage.

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 are beyond your control.

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 you. Most companies also take into account your Insurance Score (see above).

Do I need auto insurance even if I don’t have a car?

A: Yes. In most states you must have an insurance policy in your name or be specifically named as a driver on an insurance policy to legally operate a motor vehicle.

Q: Will my auto insurance cover me if I use my vehicle in a business or drive for a service such as Uber ®?

A: Many auto policies have exclusions for certain business uses. Be sure to let us know if you use your vehicle in any capacity to earn money or on behalf of a business. There are many instances in which we can still provide coverage on a personal auto policy (such as salespeople, trade contractors, and real estate agents who use their personal vehicles for work). In some instances the policy requires modification to reflect a higher rate for the business risk. There are also certain uses that will require you to obtain a business insurance policy. We write business auto insurance for most risks and the cost is usually not as much as you expect.

What if I use my car to drive for a service such as Uber® or Lyft®?

A: Anytime you charge someone a fee to ride in your vehicle you will likely void coverage under a standard auto policy. If you plan to generate income from a ride-sharing service it is imperative that you contact us first. We have various solutions to provide depending upon your insurer. While there will be some additional cost involved it is important to have your insurance modified to provide appropriate coverage.

Coverage issues for ride sharing are various and differ from carrier to carrier but in general there are two big issues: First, many personal insurance policies exclude all coverage when a driver has their ride sharing application on “trolling” for riders but the coverage provided by the ride sharing service does not start until you pick up a driver. This creates a gap. There is also a danger of being perilously underinsured if the amount of insurance a ride sharing company offers you is less than the total damages awarded in a lawsuit. For these and other reasons we recommend you contact us to review insurance before you use your vehicle in any ride-sharing capacity in which you are compensated.

Who do I need to list on my policy as a driver?

A: Anyone who lives in your household, and is of age to operate a motor vehicle, should be listed as a driver. If there is someone who lives with you who has their own auto insurance or someone who does not have a license and/or is not permitted to operate your vehicle you may not be required to list them however you may also not have any coverage if they use your car. The safest course of action is to discuss any questionable drivers with your agent.