Understanding Your Auto Insurance

Some of life’s ups and downs can effect more than we first realize. When you get married, your child turns 16 or you move, you know that life will be a little different. But did you realize that your car insurance may be affected too? This guide lays out some common situations that can play a role in your auto insurance premium.

Types of Car Insurance

Did you know that each state has slightly different insurance requirements? Which means some of the following types of insurance may be required by your state while they’re not required in another. It’s best to contact your insurance agent to find out what your state mandates so you get the right protection on the road. Remember, even if a coverage isn’t state mandated, you may want to add it to protect your car, your passengers and yourself with even more protection. Here are a few of the more common types of car insurance. Contact your agent for a complete list of available options and a thorough explanation of each.

Collision insurance. When you think of a car accident you probably think of a collision between two or more vehicles. This is exactly what collision insurance is for and it helps cover your damages whether the accident is your fault or not. Collision insurance doesn’t just kick in when another car is involved, it’s also your go-to if you hit an object such as a mailbox, a tree, a guardrail or other object.

Comprehensive auto insurance. While many accidents involve other drivers, there are accidents that don’t involve another vehicle — this is where comprehensive insurance steps in. Comprehensive pays for things like theft, collisions with animals, vandalism, fires or explosions, hail or natural disasters, floods and more.

Underinsured motorist coverage. It’s frustrating when you take all the precautions you can to protect yourself and then you’re injured by a driver who doesn’t have enough insurance to cover your injuries or damages. A quick fix to this problem is to talk to your American Family Insurance agent and ask how you can get underinsured motorist coverage.

Uninsured motorist coverage. While most states require all drivers to have some form of car insurance, not everyone complies with the laws. If you’re hit by someone who has no auto insurance you’re going to be very relieved that you were proactive about insurance and opted for uninsured motorist coverage.

Gap lease/loan insurance. If you lease a car or have a loan on it, this may be just want you need. Leases and loans tend to last for years, but your car depreciates rather quickly. Which means at some point you can owe more on the vehicle than it’s actually worth. If you get in an accident in that timeframe, your regular car insurance will cover up to the value of the vehicle, but you owe more than that on the loan balance. This is where gap lease/loan insurance steps in and helps cover the difference.

Emergency roadside service. This is a smart addition to any insurance package. When you need service and support for your car, it’s right there to help! Emergency roadside service helps cover towing, battery jumps, some tire servicing fees, delivery of gas and/or oil, locksmiths and some roadside repairs.

Changes You Should Report to Your Insurance Agent

Even before you drive that new car off the lot, your insurance agent has you covered because you let them know you were buying a car that day. But did you know there are other life changes that you should keep your agent aware of too? Some of them could cause your rates and coverage to change.

Name changes. If you’ve had a name change, it’s best to let your agent know as soon as possible, just to keep your policy information accurate and up to date.

A new address. The most obvious reason to change your address with your insurance agent is to keep your records current. But there could be a benefit to moving, too. If you’re moving very close to your work, you might qualify for savings for being a low mileage driver.

Marital status. If you get married or divorced, it’s best to connect with your American Family Insurance agent as soon as possible to let them know of the change. Usually, this will mean you’ll be changing your policy(s), whether you’re including your new spouse or your ex and you will be taking out separate policies. It’s easy to forget about this during these busy times but one quick call can quickly get things in order.

Teen drivers. By the time your child turns 16 and is ready to hit the road, you’ve probably already been thinking about their safety. One way to ease your mind is to make sure they’re covered under your policy as soon as possible. Even before they get their own vehicle you should connect with your agent to reevaluate your insurance options. Another way to ease your parental concerns is to sign them up for American Family’s Teen Safe Driver. This program not only teaches them how to master safer driving habits, you could also earn up to a 10% car insurance discount!

Discounts for Your Car Insurance

While some of life’s big changes could earn you some discounts, consider whether these other car insurance discounts can work for you. The best approach is to connect with your American Family Insurance agent and discuss your personal situation to find out what discounts apply.

Bundle and multi car discounts. It pays to keep your insurance under one roof. It’s also a lot easier to manage your policies when you have one insurance company, which is why American Family Insurance rewards you for your loyalty with discounts for multiple cars or bundling policies.

Discounts for young drivers. Whether your young driver is a good student, enrolled in the Teen Safe Driver Program, away at school, a generous volunteer or just a generational customer, we’ve got a young driver discount for them.

Good driver discounts. Sometimes it feels like doing the right thing goes unnoticed. That’s why we reward our good drivers with discounts. Ask your agent if you qualify for the good driving discount, the defensive driver discount and/or the auto safety discount. You deserve it!

Situations That Can Cause Your Car Insurance Rates to Increase

An accident, traffic ticket or other damage to your car may affect your auto premium or insurability. Here are some examples of incidents that may be a factor in determining your premium.

You get a ticket. How a ticket affects your car insurance depends on what type of ticket it is. For example, an operating while intoxicated ticket will have a much more serious effect on your insurance than a speeding ticket.

You’re in an accident. Depending on the number and types of car accidents you have, you might see a shift in your insurance premiums.

You are arrested for driving under the influence. If you're arrested for driving under the influence, you may be placed into a higher risk category or with a higher risk auto insurance company, which will likely raise your rates.

Hopefully this has answered many of your car insurance questions, but if you have more, your American Family Insurance agent is always happy to help. They’ll also help you review your policy to make sure you have all the protection you need and that you’re getting all of your discounts, too.


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Related Topics: Insurance Needs , Bundled Insurance , Insurance Terms