Every state has requirements for minimum amounts of auto liability insurance. If you do not purchase liability insurance, you would have to pay out of your own pocket for damages that you cause. You may also have trouble registering your vehicle or providing proof of insurance after an accident or traffic stop. If you do not purchase adequate limits, you may have to pay out of your personal assets for damages that you cause.No, but some states require you to be 18 before you can own a vehicle without an adult's name on the vehicle registration.

2.	How often do I have to renew my auto insurance?

Policies are generally issued for 6 or 12 months. Your company will send you a renewal notice.

3.	Does my auto insurance cover personal items stolen from my vehicle?

Generally not. Theft of most personal items would be covered under a homeowners or renters policy.

4.	Can I be insured on my parents’ auto insurance policy while I am in college?

In most cases, yes. Check with your parents’ insurance company for details. Be sure to ask for quotes since your premiums will most likely change when you change locations.

5.	If I loan my vehicle to a friend who has an accident, is that individual covered?

Under most circumstances, someone using your vehicle with your permission is covered by your insurance. If the individual borrows your vehicle with your permission and is involved in an accident, your insurance would pay just as if you were the driver. However, in some states, some insurers may limit coverage in these situations.

6.	Does my insurance cover me if I drive another individual’s vehicle?

Yes, in most cases. Your insurance will cover you if the insurance on the vehicle is inadequate. The coverage on the vehicle will be primary and your coverage will be excess. But there are some exceptions. For example, if a vehicle is not yours but is available for you to drive regularly, your insurance will probably not cover you when you drive that vehicle. Check with your insurance company to be certain.

7.	Does my insurance cover me if I drive a company vehicle or government-owned vehicle?

It depends. If the vehicle is available for your regular use, your insurance will probably not cover you. If the vehicle is available for you to use only occasionally, your insurance probably will cover you. You can buy coverage on a regularly-used company vehicle by buying a Named Non-owned policy or an Extended Non-owned Auto (ENOA) endorsement to your personal auto policy. Check with your insurance company to be sure.

8.	Am I covered if I rent a vehicle? Do I need to buy the insurance the rental company sells?

It is a good idea to consult with your insurance company and the rental company before you make a decision. The answer varies from state to state and the laws regulating rental car insurance change frequently.

In general, if you rent a vehicle, your own insurance will cover you in that vehicle just as it would cover you in your own vehicle. Check with your insurer to be certain. In many cases, your insurance will not cover you for any amount the rental company may charge for revenue it loses while the vehicle is out of service (for example, while collision repairs are being made). Some rental companies also charge for diminution-in-value and an administrative charge following an auto accident. These charges are probably not covered by your personal auto insurance.

For these reasons, you may want to consider buying the extra insurance offered by the rental company. It waives your responsibility for damage to the rental car in most circumstances. Unfortunately, this insurance from a rental company is very expensive — sometimes more than $20 per day. You should also check with your credit card company. Some provide rental car coverage as a special benefit.

9.	If my vehicle is in an accident and the insurance company considers it a total loss, how much will I be reimbursed?

Both collision and comprehensive coverage usually pay the “actual cash value” of your vehicle, based on current prices for vehicles of the same make and model year, with similar mileage and in similar condition. Your deductible will apply. If there are any unique features that make your vehicle significantly more valuable than the average vehicle, you should discuss this with your insurer in advance. You may be required to pay an additional premium.

10.

How do accidents and convictions affect my rates?

Company practices vary in the types of accidents and convictions that affect your rates, so you should check with your insurer. Most insurers rely significantly on at-fault accidents and moving violations in modifying your rates.

11.

Since I carry insurance to cover an auto accident, why do my premiums increase when I cause the first accident?

Before your accident, you were part of an accident-free group. After your accident, you became part of a group of individuals who have recently been involved in an accident. Over time, statistics show that the accident-free group is much less likely than the second group to be involved in accidents in the future. Insurance companies charge each group according to what they predict the group will cost them in future claims. Your premiums cover a particular policy period. It does not act as a savings account to pay for future claims. Because insurance pools risks, the premiums paid for that period must cover the accidents of all drivers in the pool during that period. However, some insurers have adopted “first-accident forgiveness.” Check with your insurer.

12.

Should I report all auto accidents to my insurance company?

Yes. If an accident involves another individual (including a passenger in your vehicle) or another individual’s property, you must report it, even if you do not file a claim. If you do not report the accident, and the other individual involved later sues you for injuries or damages, your insurance company would be at a disadvantage in defending you against the claim. It might deny you coverage because you did not report the accident. Lawsuits can result from any accident — no matter how insignificant. To protect yourself, report all accidents to your insurance company.

13.

What if I drive into another state where the insurance laws are different?

If you drive into another state where the laws require more insurance than you carry in your own state, your policy will generally cover you for the minimum requirements of the other state. Check your policy for verification. However, your coverage will not be reduced if you drive into a state that requires lower limits than those you purchased.

Updated Thursday, July 12, 2007