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AUTO INSURANCE FAQ's Do I have to tell the company about all the drivers in the household? Why does a company want to check my credit history? How long to tickets and accidents affect my rates? Will my policy cover me if I drive a neighbor’s car or if he drives mine? Am I covered if I drive to another state? What is Towing and Labor ? Are motorcycles or motor homes covered? If my car is damaged, will the company pay to replace the vehicle? What is Gap insurance on a leased vehicle? My child is under 18 and wants to buy his own car and buy minimum limits of liability. Is this wise? I was in an accident and the other party was charged with the accident. Do I have to report it to my insurance? Do I have to tell the company about all the drivers in the household? Yes. Failure to disclose any driver could result in your company denying any claim. Why does a company want to check my credit history? Companies use a lot of different criteria in determining rates. They have found that people with good credit histories are less likely to be involved in an accident. The higher the credit scores, the better the risk. How long to tickets and accidents affect my rates? In most states, the company can only use the past 3 years of your motor vehicle driving history. Will my policy cover me if I drive a neighbors car or if he drives mine? Anyone can drive your car with permission and will be covered by your policy. When you operate a vehicle belonging to someone else, his or her policy will be primary (if any) and your policy will protect you excess of that. Am I covered if I drive to another state? Yes, the driving territory is any state in the United States and includes Canada. What is Towing and Labor? This coverage provides reimbursement should your vehicle break down and need to be serviced on the scene (such as a dead battery and you need to have it jumped) or towed to a repair facility or to your home. Are motorcycles or motor homes covered? No. They must be covered on a separate policy. If my car is damaged, will the company pay to replace the vehicle? Some companies offer replacement cost coverage for the first 1 or 2 years for a new vehicle. Otherwise, the payment will be on an Actual Cash Value basis. This is generally what the vehicle is worth in the open market. What is Gap insurance on a leased vehicle? Since your policy only pays the Actual Cash Value of a vehicle, and a new vehicle depreciates a lot in the first year, there may be a Gap in the outstanding lease value and the amount paid by the insurance company. Many companies offer Gap coverage. In some states it is automatically included in the policy. My child is under 18 and wants to buy his own car and buy minimum limits of liability. Is this wise? NO! As your child is a minor, you could be held responsible for any liability they cause. Your childs limits should be at least the same as you have for your vehicle. I was in an accident and the other party was charged with the accident. Do I have to report it to my insurance? My advice is yes. Your policy requires you to promptly notify it should there be an accident. Even though you were not initially charged, it is possible to be charged later. A company may decline a claim due to late notice. © Franklin Insurance Group 2008