Car Insurance

For most of us having a car is not a luxury but a necessity. You depend on your car to transport you and your family every day; whether you are running errands, driving to a destination on a vacation or going to and from work.

Since you depend so much on your car, you need dependable car insurance that suits your own personal needs. You can trust Frederick Multi-Insurance Agency to find you the best coverage at the most affordable price.

Who needs car insurance?
Every body that has a car registered in his/her name needs to have liability insurance to protect them against claimants, and you must carry physical damage protection on all cars that are being financed.

If a vehicle is being leased, and not purchased you must still carry physical damage protection insurance. When renting a car, it’s always a good idea to purchase the rental car agency’s insurance, in case of an accident, then it saves you a claim under your personal policy and you don’t have to pay your policy’s deductible.

Why is car insurance necessary?
First of all, you need insurance because it is the law. All or most of the state require that any car that is circulating in traffic be insured.

Second you need it to protect you investment. If you purchased your car without having to finance it but your car still has considerable value or retains its value, then its advisable to protect your investment by purchasing comprehensive coverage (covers: theft, fire, vandalism, glass coverage and if you hit an animal).

You should also consider purchasing collision coverage (covers: accident with another car or property including trees, potholes, poles, and fences).

What is the minimum liability coverage that I’m allowed to carry?
Each state has its own rules and requirements. In the metropolitan area the minimum limits of liability are:

Bodily injury per person is the total amount the insurance company will pay for injured claimants.

Bodily injury per accident is the maximum amount the insurance company will pay per accident, regardless of the number of people in the car.

Property Damage per accident is the maximum amount the insurance company will pay for damages to another property or car if you total loss another vehicle.

This is why it is a very good idea to purchase the highest limits that you can afford, since the minimum coverage is quite low.

If I let someone borrow my car and they have an accident is it covered?
If the named insured gives a licensed person permission to drive his/her car, most insurance companies will extend coverage.

Permissive use is always verified and insurance companies will keep a record of the person to whom the car was lent. If you lend your car to a friend or relative on a regular basis or that person lives with you, then you must call your insurance company and include this person on you car policy.

In some cases, a person will lend a car to a friend or relative and that person in turn will lend the car to another friend or relative. In such a case, most insurance companies decline to cover an accident since the first named insured did not give permissive use to the person involved in the accident.

How will it affect my policy, if the person to whom I lent the car has an accident while driving my car?
It depends on the insurance company’s guidelines or rules. You could be asked to exclude that person from further driving you car or you could get an accident surcharge, depending on the amount paid due to the accident.

Some companies will forgive the accident if it was a one-time incident.

What causes my premiums to increase?
Any number of changes can cause a premium to increase. Some examples are:

• change of address to a higher rated territory
• addition of a youthful or new or inexperienced driver
• accident or moving violation surcharges and
• company rate increases (usually based on the previous year’s accident and losses paid experience).

What can I do to lower my rate?
Take advantage of discounts that you may qualify for. Most companies offer discounts if you have more than one car, or if you have a second line of insurance such as renters or homeowners/condo-owners.

Some companies will apply longevity discounts, the longer you stay with them the higher the percentage of the discount. Having a high credit score and keeping a clean driving record (ticket and accident free for over three years) also provide discounts, depending on the insurance carrier. It is very important to have an honest and knowledgeable agent in order to get the best rate possible.

What should I do in case of an accident?
If you are involved in an accident, you should:

• Try to remain calm
• immediately get the other persons driving information and license plate number
• obtain names, phone numbers and addresses of any eyewitnesses that saw the accident but were not involved in any way or were passengers in either car.
• You must never admit to being at fault or apologize for causing the accident, simply exchange insurance information
• call the police if the situation merits it and call your insurance agent as soon as you can.
• If you are injured then you should call or have someone call 911 for you.

What is a deductible?
A deductible is the portion of your claim that you self-insure. Deductibles range from $100-$2000, the higher the deductible you choose the lower the premium. Conversely the lower the deductible the higher the premium.

Keep in mind that deductibles in regards to car insurance are per occurrence.

For example:
You have a car accident and there is $1000 worth of damage to your car. Assuming, your collision deductible is $500 then you would pay $500 and the insurance company would pay $500.

On the other hand, if your deductible was $250 then you would pay $250 and your insurance company would pay $750.

Deductibles usually apply to collision, comprehensive and uninsured motorist property damage coverage.

What tickets affect my driving record and insurance premium?
The tickets that affect your driving record (put points on your license) and therefore cause an increase in your insurance premium are the moving violations.

Some examples of moving violations are:

• speeding,
• turning on or running a red light
• driving under the influence (DUI) and
• driving while intoxicated (DWI)

Parking tickets and camera tickets do not affect your driving record and insurance premiums. Camera tickets do not affect your record because the camera takes a picture of the car and the tags on the car or it records the speed the car was traveling, but it does not take a picture of the driver.

Always pay camera ticket fines since most motor vehicle agencies will suspend the registration belonging to that car if the ticket is not paid.

How long do the tickets remain in my driving record?
Depending on the state that you reside in, tickets can stay on your record between three to ten years. Insurance companies that are authorized to do business in Maryland, Virginia and the District of Columbia can only underwrite for moving violations that are three years or less.

Even these companies will look back as far as five years to see your full history.

What type of coverage should I purchase?
The type of coverage that you decide to purchase will depend on your situation.

If you have a new car that is paid in full you could purchase liability only, to cover damages that you could cause to another person(s) or property. You could also purchase liability with physical damage to protect your car as well as the damages to others as described in the previous statement.

If you are financing or leasing a car, then you must purchase car liability and physical damage since the car is not yours until paid, and the financing or leasing company requires you to purchase insurance to protect the car.

If you have an older vehicle (usually over 10 model years old and with 100,000 miles or greater) then you could opt to purchasing liability coverage only, since in some cases the insurance premium might exceed the car value if declared a total loss.

That would be your personal decision, if your situation falls under the last example. No one can make that decision for you, the owner of the car.

Contact Us today for a free rate quote.