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Auto Insurance F.A.Q. (Frequently Asked Questions)

Q: Does my state require that I carry auto insurance ?

Q: What is the penalty if I don't carry auto insurance and I am requred to in my state.

Q: At what age can I legally carry auto insurance in my name?

Q: What kinds of factors influence what I pay for auto insurance?

Q: Will one accident make my auto insurance increase?

Q: What happens if I DO have a prior accident(s), a D.U.I  or both on my driving record.

Q :What is SR-22?

Q: Does my state require that I carry auto insurance (aka car insurance)?

A: That's a good question. You can find out the answer to that question by clicking here .

Q: What is the penalty if I don't carry auto insurance and I am required to in my state.

A: You can also find out the answer to that question by clicking here . If you need further information you can check with your state's Department of Motor vehicles by clicking here.

Q: At what age can I legally carry auto insurance in my name?

A: You should check directly with the insurance company you are looking to get a policy with. More than likely it is a minimum age of 18.

Q: What kinds of factors influence what I pay for auto insurance?

A: Well for starters your age and gender greatly influence what you will pay for car insurance. The younger you are the more you likely pay and being a guy won't help. Women statistically make safer drivers. This obviously has to do with the emotional maturity level of younger drivers. Younger drivers are apt to be more likely to let their emotions translate into actions on the road. We know this can seem unfair to younger drivers that are mature for their age and disciplined on the road but companies set their guidelines by using statistics. And statistics show younger drivers tend to have more accidents. Another factor that will affect what you pay for auto insurance will be the population density of the area of the U.S. you live in. For example, a 21 year old driving a car around New York city daily will pay more on average than a person of the same age driving a car down in Blacksburg Va. on a daily basis. Both drivers being equal..driving record, type of car etc. Speaking of type of car. The type of car you drive is obviously another factor. A Ford Mustang GT is going to cost a lost more to insure monthly than a Toyota Corolla for example. It's all about the cylinders. More cylinders typically mean more money out of the driver's pocket when insuring a vehicle for full coverage. Some insurance companies check your credit. Get used to it. Financial responsibility translates to maturity as well. Also, whether you will be using the vehicle for during the insurance period. If you drive 200 miles daily as a courier it won't help your insurance premium. And if you have an accident while using a vehicle for employment or a business and it isn't insured as such, your company may deny any or all of your claim. So don't lie! Finally, one of the biggest factors effecting what you pay for auto insurance is your driving history. Folks that rack up tickets, accidents  pay more. It's as simple as that. And D.U.I.s (driving under the influence of drugs or alchohol). Forget it.

Q: Will one accident make my auto insurance increase?

A: It's difficuly to say. Typically no. Of course this depends on the accident, the insurance company and your driving history. Most companies won't raise your insurance after just one accident. However, if there are circumstances such as a D.U.I. involved in the accident for example the company might drop you as a customer altogether. Especially if there was extensive injury or death. It's their legal right to do this after they satisfy the claim.

Q: What happens if I DO have a prior accident(s), a D.U.I  or both on my driving record.

A: You become classified as what's called an SR-22 driver.

Q :What is SR-22?

A:  People that are convicted of DUI, have excessive speeding tickets, accidents, or even failed to maintain proper insurance on their vehicles become classified as "SR-22". They become classified by each state and insurance companies licenced to do business in those states as what's called an "assigned risk" or "high risk". What happens is, insurance companies don't want to insure drivers like this. And for good reason. Drivers that rack up tickets, accidents, and D.U.I.s are not worth the premiums they might pay a company to insure them. And because the potential for a large pay out from the company is so great, the companies don't want to take the risk associated with a driver like this. And for good reason.  But regardless of how high an insurance company might set their premiums for a particular driver, that driver just might not be worth it. Let's face it, rich people can afford to rack up LOTS of traffic offenses, pay them off AND pay a skyrocked insurance premium.  In the past, if the potential for disaster was too great for a given driver many companies would just say "so sorry, there is no way we WILL insure you"!  But what began to happen was, larger insurance companies wouldn't touch these drivers so smaller, less financially established companies would pick up these high risk drivers on the bet that they would pay the higher premiums, and thus propel the smaller company forward financially. The problem with this is the obvious risk for the these small companies being able to stay in business long enough in the event of a catastrophic claim before the company's coffers could grow sufficiently enought to place them out of financial danger. And many of companies did indeed lose that gamble leaving each state government to pick up the pieces of a financial disaster after a small company would go bankrupt. 

So, in 1947 the state government of California came up with state forms SR-21 and SR-22 (Substantial Risk 21-22). SR-21 is for tickets and accidents and SR-22 is for DWI or what is referred to a D.U.I today to include drugs. Which basically says if an insurance company wants a license to do business in a given state the company MUST participate in the "SR-22 acceptance of responsibility program"  for high risk drivers. Each state places all high risk drivers in a category of "SR-22" and effectively the companies are insuring the driver through and sometimes with the help of the state. Financial responsibility is different from state to state but typically when you become classified as SR-22 you will remain that way for a time period of three (3) years. And in most states you MUST carry a valid SR-22 policy even if you don't own a car! If you have a driver's license you must carry insurance if you are SR-22. Of course you should check with your state's Department of Motor Vehicles to find out what the state's law is on SR-22. If you would like to contact your DMV click here.

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