Mathew B. Sims is Editor-in-Chief and has authored, edited, and contributed to several books. He has been working in the insurance industry ensuring content is accurate for consumers who are searching for the best policies and rates. He has also been featured on sites like UpJourney.

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Dan Walker graduated with a BS in Administrative Management in 2005 and has been working in his family’s insurance agency, FCI Agency, for 15 years (BBB A+). He is licensed as an agent to write property and casualty insurance, including home, auto, umbrella, and dwelling fire insurance. He’s also been featured on sites like Reviews.com and Safeco. He reviews content, ensuring that exis...

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Reviewed by Daniel Walker
Licensed Auto Insurance Agent

UPDATED: Apr 24, 2020

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Advertiser Disclosure: We strive to help you make confident insurance decisions. Comparison shopping should be easy. We partner with top insurance providers. This doesn’t influence our content. Our opinions are our own.

Editorial Guidelines: We are a free online resource for anyone interested in learning more about auto insurance. Our goal is to be an objective, third-party resource for everything auto insurance related. We update our site regularly, and all content is reviewed by auto insurance experts.

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 Auto 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 – Collision 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.

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Non-Standard Auto Insurance

You can look for insurance quotes without providing a social security number or driver’s license. Some insurance companies 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

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

  • Medical – The medical sub-component pays for medical bills sustained by the policyholder in the case of an accident. Passengers in the vehicle are covered under this 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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Auto Insurance 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 to five 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!

References:

  1. http://www.dmvnv.com/50_state_dmv_list.html
  2. https://www.allstate.com/auto-insurance/collision-coverage.aspx
  3. https://www.allstate.com/tools-and-resources/car-insurance/what-is-comprehensive-auto-insurance.aspx
  4. https://www.thebalance.com/keyed-car-and-vandalism-insurance-claims-527101
  5. https://www.allstate.com/tools-and-resources/car-insurance/liability-car-insurance-cover.aspx
  6. http://www.21st.com/auto-insurance-information/what-is-the-driver-training-discount.htm