Automotive Insurance Information And FAQ’s

Lending Car Causes Increase in Automotive Insurance Quotes

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Reader’s Question:

My rates have been much higher after my friend got into an accident while using my car. Where can I get the cheapest automotive insurance quotes?

Tony

Chicago, IL

Lending your car may not be a very good practice especially if it is going to be in the hands of an uninsured driver even if he is your friend. Say he gets into an accident and causes considerable damage. The insurance that kicks in to pay for liability will be yours. And this will be put against your automotive insurance record even if the accident was really not your fault. Unless, of course, you are able to provide proof that the car was taken by your friend without your permission, then you will just have to face up to the fact of paying such high premiums. It is the automotive insurance standard that rates be increased up to 40% if the policyholder’s record involves a first-time claim. While there may be automotive insurance companies willing to forgive that first road accident, most insurers do not, and one that does is quite uncommon.

If you are thinking of shifting to a different provider, then there are several ways to look for the cheapest automotive insurance quotes. The most time-saving method would be to search the Internet. There are a lot of insurance websites out there that can quickly present you with automotive insurance quotes as soon as you complete and submit their online forms. You can easily list down the several automotive insurance quotes you’ll get from your search and quickly see which companies provide the cheapest rates.

 

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Why Automotive Insurance Companies Conduct Risk Assessments

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Reader’s Question:

Why do automotive insurance companies conduct annual risk assessments? What effect does it have on my premiums?

Bridget

Nashville, TN

Basically, automotive insurance companies conduct annual risk assessment for them to determine your premiums based on calculated risk. Annual risk assessment is a point system used to gauge if have you been a good driver, or whether you have
had charges brought against you, moving violations, reprimands, usage, miles covered, etc., etc. This would be the insurance carriers’ basis for setting your current premiums. If your rating is high based on the calculated risk, these automotive insurance companies will most likely charge you higher premiums. You have to remember that the higher the risk, the higher your premiums get.

Depending on jurisdiction, your premiums can either be authorized by state laws or determined by your carrier. More often than not, your automotive insurance company determines your monthly premiums and has more freedom to set the actual coverage that you are going to get. With these auto insurance companies, setting the premiums vary, depending mostly on the factors that could affect the cost of future claims. Therefore, your risk for accidents, citations, etc., would, in this case, translate to higher probability of repair or damage cost, penalties, fines, and higher probability for benefit claims. Insurance companies use this as a standard on which to base their clients’ premium rates, and it would definitely help if you could make sure not to be a “high risk driver.”

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