What do standard auto insurance companies offer?

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Things to Remember...
  • Auto insurance companies offer standard insurance and non-standard insurance
  • Standard insurance covers collision, comprehensive, and liability
  • Special situations such as past DUIs and classic cars may require you to purchase a non-standard insurance policy

Auto insurance companies offer policies in adherence with each state’s Division of Motor Vehicles. All drivers must carry automobile insurance to comply with state laws. Each state has a commission that regulates auto insurance companies closely to prohibit unfair pricing practices.

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Standard Insurance Policy

Auto insurance policies are priced based on multiple factors, including accident statistics, repair statistics, prices for replacement parts, driving records and car prices.

Auto insurance coverage falls into three major categories:

  • Collision – A collision policy covers damage in the event of a collision between a moving vehicle and another vehicle, or between a vehicle and a stationary object. Payout limits and deductibles determine how much money the insurance company will pay for each claim and how much money the driver must pay out of pocket.
  • Comprehensive – This component covers damage that may occur while a vehicle is not in motion including theft, vandalism, storm damage or fire.
  • Liability – This component covers damage owned by a third party in the event of an accident. All states require drivers to carry the legal minimum level of auto insurance. Many auto insurance companies encourage drivers to carry more liability coverage in order to offset the costs of litigation.

Non-Standard Auto Insurance

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You can look for insurance quotes without providing a social security number or driver’s license. Some insurance company can refuse to underwrite a standard auto insurance policy for any of the following reasons:

  • High incidence of claims – Drivers with a significant number of auto insurance claims can be denied coverage from standard auto insurance companies
  • Serious accident – A driver who caused an extremely serious accident through negligence will find the search for auto insurance coverage very difficult. Insurers can refuse to underwrite a policy based on your driving record
  • DUI – People always want to know if it is possible to find cheap auto insurance with DUI violations. Some insurance companies may refuse to underwrite auto insurance policies for anyone with a DUI conviction.
  • Custom built car – Vehicles with custom features are not underwritten through standard auto insurance policies.
  • Classic car – Collectible cars are defined as having a collectible value and often will not be covered through standard auto insurance.

Tailored Sub-components

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Standard auto insurance policies are made up of various components that some drivers may unfamiliar with.

  • Medical – Drivers who do not have insurance coverage can purchase the medical sub-component to pay for medical bills sustained by the policyholder in the case of an accident. Passengers in the vehicle are covered under the liability component.
  • Uninsured motorist – In the case of an accident, policyholders may encounter drivers that do not have insurance. This component will cover the cost of the other driver.

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Discounts Offered

Discounts are offered to drivers who demonstrate responsible driving habits. It is important to know what discounts are offered and know which ones you qualify for.

  • Driving Record – Insurance companies rely on past performance as an indicator of future risk. A clean driving record can lower your premiums. Typically, your past three years influence annual premiums.
  • Driver Profile – Age, location and claims history are tracked closely to create statistics for each insured class. All these factors will affect the cost of your premiums.
  • Vehicle features – Some cars are more expensive to repair or replace than others. The value of your car will also affect the cost of your insurance rates.
  • Advanced training – Driver training courses reduce the number of claims that are filed by drivers. Significant discounts on standard insurance policies are awarded to drivers who are willing to complete these courses.

Automobile insurance companies cover a wide variety of drivers and vehicles through standard car insurance policies.

Do your research in advance to know your options and find what’s right for you. Enter your zip code below to get started!

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