Houston Car Insurance

Frequently Asked Questions

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What affects the price of my car insurance?

What you pay for auto insurance varies by company and by:

• What you buy
  • Coverages are priced individually so how much you'll pay depends upon:
    (1) How many coverages you buy, and:
    (2) How much each will pay. Deductibles lower the price by shifting part of a loss to you.
• What kind of car you drive
  • affects how much you pay, since coverage on your vehicle depends on its value. Generally, the more expensive the car, the more you pay.
• Where you drive.
  • Drivers tend to have more losses if they live where there's a high rate of accidents or vandalism. Generally, urban drivers pay more for insurance than those in small towns or rural areas.
• How much you drive.
  • The chance of an accident generally increases as driving increases. People who use their car for business and long-distance commuting normally pay more than those who drive less.
• Your age, sex, and marital status.
  • Accident rates are higher for all drivers under age 25, especially young males and single males. Insurance prices in most states reflect these differences.
• Your driving record
  • also affects price. Drivers who cause accidents generally must pay more than those who are accident-free for several years.

What is car insurance, and why do I need it?

What is car insurance?
A car insurance policy is a contract between you and an insurance company. You pay a premium, and in exchange, the insurance company promises to pay for specific car-related financial losses during the term of the policy.

Why do I need it?
In some states, to drive (get license plates) you must carry:

• Liability coverage to pay for losses you cause others, or:
• No-fault coverage to pay you and your passengers for medical and related expenses caused by injuries from a car accident, regardless of fault, or
• Both coverage

Even in states where coverage isn’t required, drivers must, by law, be able to pay for losses they may cause others. Having insurance is the simplest way for most people to comply. Coverage for vehicle damage usually is necessary to finance a car.

Without insurance, you risk paying for the full cost of:

• Any harm you cause others, or:
• Repairing or replacing your car if it’s damaged or stolen

Who is covered under a car insurance policy?

Your policy usually covers you, your spouse, and other relatives who live primarily in your household and others who have permission to drive one of your covered vehicles.
 

What are my coverage and deductible options?

Deductibles
The deductible is the portion of a covered loss that is your responsibility. The deductible, when applicable, applies to each covered loss. Although deductibles vary by state, they are typically available in amounts such as $100, $250, $500, or $1000.

For example, if you had a $500 deductible, you would need to pay $500 of the covered loss.

Generally speaking, higher deductibles lower your premium, but increase the amount you must pay out of your own pocket if a loss occurs. Ask yourself how much you are willing to pay in order to save on premium.
 

How much car insurance do I need?
Questions to ask yourself and your agent:

• How high should my liability coverage limits be? No one can predict exactly how much you would have to pay if you were to cause an accident. Ask yourself how you would pay for any damages exceeding your coverage limits. The higher your limits are, the more likely your policy will be able to pay all of the damages.
• How high or low should my collision and comprehensive deductibles be? Higher deductibles lower your premium but increase the amount you must pay out of your own pocket if a loss occurs. Ask yourself how much you are willing to pay in order to save on premium.
• Should I carry collision and comprehensive coverage? You may be required to carry collision or comprehensive coverage if your vehicle is leased or financed. As your car's value decreases, you might consider dropping these coverages and pocketing the savings on premiums. Consider, though, if the savings are enough to offset the risk of footing the entire cost of repairing or replacing the vehicle.