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Auto Insurance FAQ

By Compuquotes Team on March 26th, 2008

Am I required to have auto insurance?
In the United States and Canada you are required to have car insurance if you operate a motor vehicle.

What exactly is auto insurance?
Auto insurance protects you against losses that are incurred because of traffic collision, fire, theft or other damage. It also protects you against damages to other people and their property if you are found at fault in an incident.

What happens if I don't have car insurance?
While it varies from state to state and province to province in Canada, you can expect a hefty fine, potentially the loss or suspension of your license and vehicle registration and even jail time.

How are my insurance rates decided?
In some areas, the insurance premiums are mandated by the government, however in most areas, the premium is decided on based on actuarial calculations, which takes statistics into account. As well, your age, the car you drive, the area you live in, how you use the vehicle and your driving history coupled with the insurance coverage that you select.

Is my insurance valid on other people's cars?
If you are driving someone else's car and you have insurance on your own vehicle, chances are you can use your insurance on the car you have borrowed. However, it is important to check with your insurance company before assuming this is true.

What if I'm driving someone's car and I get into a collision that is my fault, but then I find out my friend doesn't have insurance?
It's your responsibility to find out if the vehicle you are driving is properly registered and insured before you drive it. If you have your own vehicle insurance, you can have the vehicle you were using covered under your own insurance, but you should check with your insurance company. If you do not have insurance, you are likely still liable for the damages to the other people and their property and will face the same fines and penalties.

What is liability insurance?
Liability insurance provides coverage for you if you are found legally liable due to negligence or an accident. Liability is offered in combined single limit and split limit policies. Combined single limit covers injury claims and property claims under the same coverage and with one limit. Split limit splits the liability coverage between property damage and bodily injury coverage and can each have separate limits.

What is collision insurance?
Collision insurance covers your vehicle in the event of a motor vehicle collision or accident

What is comprehensive insurance?
Comprehensive insurance covers your vehicle for damage that isn't caused by a collision, such as fire, theft, vandalism, impacts with an animal or weather.

What is GAP insurance?
GAP insurance covers you for the price of your vehicle if you owe more than the vehicle is worth and it is involved in a collision where a total loss (totaled) has occurred.

How do I know what the best insurance rate available to me is?
The best thing to do is to get a variety of quotes from different insurance companies, based on the same vehicle and coverage. Your quotes for insurance can differ by hundreds of dollars from different insurance companies.

How much do insurance quotes cost?
Nothing. You should never pay for an insurance quote.

See average annual insurance rates for more than 2,000 vehicles

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