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So… you’re shopping around for car insurance. What do you think you need to know? Well, there are lots of things most people ask me when they come into my office. Here’s a few answers to some questions you probably have.1. Will My Rates Go Down When My Policy Renews? – Most of our clients believe insurance rates are based on tenure with an insurance company. There is some truth to that, as most insurance companies have discounts available, but those discounts usually don’t kick in until you’ve been with the same company for 3 to 5 years. Rates are based on a variety of factors, such as how long it’s been since you’ve had a ticket or accident, how long you’ve had insurance in total, and the performance of other people your company insures in your area.

Tip. Talk to your agent about what they’ve seen happen recently. Some policies come with loyalty bonuses just for renewing your policy every six months.
2. How Long Do I Have Until My Policy Cancels? – Most policies have a grace period of 5 to 7 days from the due date, unless you are at your renewal. At renewal, there is no grace period and those payments must be made on time to ensure coverage is in force if you have an accident.

Tip. Make sure you know exactly how long your grace period is. Talk to your agent so you know you’re covered at all times. To avoid lapses, consider setting your policy up so it’s paid by automatic bank draft. Your payments are never late, and you won’t have a lapse if you overlook your grace period.
3. What Coverage Does The State Require? -Arizona currently requires Bodily Injury Liability limits of $15,000 per person / $30,000 per accident and $10,000 for property damage liability.New Mexico currently requires Bodily Injury Liability limits of $25,000 per person / $50,000 per accident and $10,000 for property damage liability.

Tip. If you have anything to lose, I hope you aren’t relying on the State to save you. Talk to your agent about what is really right for you and your family.
4. How Long Do Tickets and Accidents Stay On My Insurance Record? – Tickets usually stay on your insurance record for 3 to 5 years, depending on what you were cited for. Speeding and other minor violations usually stay out there for 3 years. DUI’s and other Major violations can stay on your insurance record for 5 years or more! Accidents, including ones that weren’t your fault, can stay on your record for the same 3 to 5 years, depending on the insurance company you are with.

Note. To get detailed information on your policy, ask your agent.
5. When Do I Have To Add My Children As Operators on My Policy? – If your young one is licensed to operate a motor vehicle, you should add them to your policy immediately upon being licensed. Once your insurance company is able to run Motor Vehicle Reports on their license, add them. This is the only way to make sure they are covered drivers on your policy. Many people are worried about the additional investment of adding their children to their insurance properly. Simply consider the cost of not doing so. An uncovered liability loss where another person is injured could easily be financially devastating, even if the injuries to the other person are minor. Health care costs have tripled in the last 10 years, and a visit to the ER could leave you with a bill in the tens of thousands of dollars.

Tip. If your child has a B average or better and is still in school, most insurance companies offer a heafty discount that could save you hundreds of dollars a year when you add your child to your policy.
6. If I Let Someone Borrow My Vehicle, Are They Covered Under My Policy? – Let’s say you let Uncle Bob use your pick-up to go to the city and pick up a refrigerator. If Uncle Bob has your permission to drive the vehicle AND he has a valid driver’s license, he’ll be covered under your insurance for the vehicle you allow him to use.

Tip. As a general rule, most anyone you allow to use your vehicle temporarily will be covered – unless their license is suspended, revoked, or otherwise invalid.
7. I Recently Got Divorced. Can I Remove My Ex From My Policy? – Auto insurance companies are regulated by the State. Most all States are all common law States. It is illegal for your insurance company to remove your ex-spouse without their express consent. Insurance companies always require a signature from the ex-spouse to remove them from your policy. If your ex refuses to sign themselves off your policy, most insurance companies will allow you to Split-off of your existing policy to start one of your own, leaving the spouse unaffected on the original policy you established together.

Tip. Make sure you are on speaking terms with your ex to make life a lot simpler for you.
8. What is the Difference Between Preferred (Standard) and Non-Standard Insurance Companies? – Generally, most major insurance companies have two different sub-companies: a Preferred, or Standard, company they put all the good risks into, and a Non-Standard company for the bad risk drivers. It is usually easy to qualify for a Preferred company if you have a good driving record and a history of continual insurance in your name. For those who have bad driving records, accidents, or don’t have insurance within the last 30 days in their name – it is almost impossible to get into a Preferred insurance company. That’s why most major insurance companies have a Non-Standard company they can place those risks in until they can qualify for the Standard or Preferred company

Fact. Rates can really vary from Standard to Non-Standard companies. If you’re placed into a Non-Standard company, expect to pay more for the next couple of years.
9. Why Do Insurance Companies Use My Credit To Rate My Policy? – The banks have been so successful with credit scoring models that many companies simply can’t overlook the value of running a credit report any longer. Most major insurance companies will ask to run a credit report on you when you apply for insurance because there is a direct correlation between credit risk and insurance risk. Statistics have shown that those drivers with a good credit rating are less likely to file a claim – and if they do, the severity of the claim will be relatively low. On the other side of that coin: if a driver has a poor credit rating, statistically the frequency and severity of claims filed goes way up.

Fact. Many insurers now use your credit history as a major factor in determining what to charge you for auto insurance. In some cases, with some companies, you could save money by shifting your business to an insurer that uses credit as a rating factor – even if you have a so-so or poor driving record. There is another side to this coin. If you have a poor credit history, you could save money by moving your auto insurance to a company that does not use credit as a rating factor. Many insurers do not use credit as a factor.

Tip. Regardless of your credit status, you should talk to your agent to make sure you have the best situation given your credit record, good or bad.
10. I See The Commercials On T.V. About Getting Money Back and “Vanishing Deductibles”. Is it really worth it?More and more companies are offering Bonuses for safe drivers or rebates toward your next renewal if you don’t have any accidents or get any tickets during that time. You must opt-in to these benefits, as there are usually extra costs associated with them.As for the “vanishing” deductibles, I’d always stick with a deductible you can afford. If you set your deductibles up at $1,000, and you don’t have that in the bank right now, purchase lower deductibles. The last thing you want to do is park the car and save up your deductible before you can have it repaired.These bells and whistles typically cost more than policies without them. Good, sound coverage discussions should never revolve around the extras you can get on a policy. Once you’ve got the basics covered, then look to see what else is appealing you may want.Whatever your driving record or coverage needs, you should let an experienced insurance professional show you what coverage options are available to you AND how they benefit you. They will be able to explain what’s in it for you. After all, that’s what you really want: Coverage that will actually help you when you file a claim. There are literally thousands and thousands of coverage options from hundreds and hundreds of insurance companies. We know it can get confusing. That’s why agents are here to help you chose the right package option and coverages that are right for you and your family.