FAQ on car insurance
Is car insurance mandatory?
Yes, car insurance is mandatory in most states. It is used as a proof of financial ability to face third party liability in case of an accident. It is a legal requirement and if you do not meet it you can face a fine, license suspension or even time in custody depending on the local legislation.
Am I obliged to buy all coverage types?
No. The only coverage type that is actually required legally is the third party liability, which includes property damage and bodily injury liability. All other types of coverage are optional and you can either purchase the ones you need or exclude the ones you don't from your car insurance policy. Take note, however, if you're financing the purchase of your new car through a loan you are likely to be obliged contractually to include collision and comprehensive coverage to your policy for the loan to be issued.
Does a no fault policy mean that I'm automatically not at fault in an accident?
No. By purchasing a “no fault” policy you only assure that you will be covered regardless of who was actually at fault during the accident. Such a policy doesn't require a “fault” conclusion to pay out the coverage and usually pays for the damage you car has taken during the crash. So it's not very bright to try to convince the police officer that you weren't at fault just because you have such a policy.
What affects my rates?
There are many factors that affect the final rates you are charged with for having a valid car insurance policy. All these factors are used to determine how much of a risk you are to the insurance company. The higher is the risk the higher are the rates. Each company uses different formulas with different factor weights, yet the set of factors is basically the same everywhere and includes such variables as car make and model of the car, its engine volume and top speed, repair costs and theft rates, security features and safety ratings, your driving and credit rating, education, marital status and place of residence among many others.
Can I include more cars into my current policy?
Most car insurance providers allow including more cars to a single policy and actually encourage it. You can get a discount for having two or more cars under the same policy and this way you usually get better rates if compared to buying separate policies for each car.