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What do I need to know about Auto Insurance?
In case you're involved in an accident, auto insurance provides financial protection for you and your family. It pays for the damage and injuries caused by the accident and for repairing or replacing your vehicle if it is damaged or stolen. State Requirements In most states, you are required to carry auto liability insurance (or post a bond) and provide proof of insurance before you can license your vehicle or renew your driver's license. If you are caught driving without insurance, you may have to pay a large fine and have your driver's license suspended. Most states require drivers to carry minimum liability coverage. In many cases, the required minimum coverage may not be enough to pay for all the damages that result from an accident and the driver will have to pay the additional expenses out of pocket. Contact your local Farmers agent to find out what the specific requirements are in your state. Types of Auto Insurance Coverage There are many different types of auto insurance coverage for you to choose from. Your local Farmers agent can work with you to decide what coverage combinations provide the best protection at a price that fits your budget.
In addition to basic auto insurance, consider these optional services to provide added protection for your vehicle:
Am I covered if I drive someone else's vehicle? Generally speaking, the insurance goes with the car. For example, if you have an accident while driving someone else's car, the owner's insurance would apply first toward damages. Your auto insurance would generally apply in the event the owner of the vehicle had no auto insurance or did not have enough auto insurance to pay the damages. For specific information and guidance on your coverage in this situation, contact your local Farmers agent. The term full coverage generally means that the insurance policy has both liability coverage and coverage for damage to your vehicle. The term full coverage does not mean that everything is covered no matter what happens. Your auto insurance policy declaration page lists the coverage you have selected. Will my policy be cancelled if I have an accident? Generally, being in an accident will not cause your policy to be canceled. However, after the facts of the situation are reviewed, you may be required to pay a higher premium for your policy upon renewal. If I rent a car, do I have coverage? Car rental companies charge daily fees for "CDW" coverage (which means their insurance will pay for all damages covered in your rental agreement). Rental car coverage under a private passenger policy varies state by state. Check your policy or contact your local Farmers agent. What is Optional/Add-on Equipment coverage? Under the Comprehensive and Collision portion of your policy, optional equipment (a CD player for example) is covered only if permanently installed in the opening of the dash where the manufacturer would normally install such equipment. An endorsement is available to provide coverage for optional equipment not permanently installed in the dash and for theft of items such as tapes, discs or other equipment designed for the reproduction of sound. Contact your Farmers agent for more information. What can I do to keep my auto premiums down? You can work with your Farmers agent to make sure your auto premiums are as low as they should be:
Why Do Auto Insurance Premiums Change? Auto insurance premiums change for the same reasons that the price of other goods and services you buy change. The prices of the goods and services that insurance companies buy affect the prices they charge. Costs affecting the ultimate price of auto insurance are:
Although insurance companies can't directly control these costs, we regularly monitor them to see how they are affecting the costs of the claims we pay. As they change, auto premiums must be adjusted. These costs can affect your auto insurance premium whether or not you individually have had an accident or claim. Changes you make to your auto insurance policy or coverage's may also change the premiums. Adding or removing a driver, buying a new car, moving to a new location or changing how you use your car may influence the cost of your auto insurance. We can't tell you in this brief message why your individual premium may have changed - your Farmers agent is the best person to do that. Give your agent a call if you have any additional questions after reading this. What is Farmers doing to control auto insurance costs?
What can you do to help control your auto insurance costs?
Your Farmers agent would be happy to answer any additional questions you may have. And, of course, your agent is always ready to provide you with a personal Farmers Friendly Review. Questions You May Have About Risk Assessment Indicators At Farmers, we are always looking for new ways to keep the cost of insurance affordable. When it comes to insurance, we know what you want. You want quality coverage from a solid, dependable company. You want the peace of mind that comes with knowing, in the event you need us, we'll be there to get your life back to where it belongs quickly, compassionately and with as little hassle as possible. We also understand that you want all of this at the best price possible. And you feel, rightfully so, that if you are a good insurance risk, you should be rewarded with lower premiums. This web page explains the Risk Assessment Indicator -- a tool we use during the underwriting process to help us determine the premium you pay and, in some states, eligibility for insurance. Hopefully, it will answer any questions you have. As always, feel free to contact your agent if you still have questions. Why Does Farmers Use Risk Assessment Indicators? Several years ago, Fair, Isaac & Company, a company that specializes in predictive modeling, developed the concept of assessing a customer's credit history and evaluating it to predict future insurance losses. At the time, many industry experts had proven that a correlation existed between credit history and insurance risk. Convinced that it was a good way to accurately and fairly segment the appropriate rate for the appropriate risk, Farmers started using Risk Assessment Indicators. Keep in mind, this is one of several factors that may be considered in determining your premium. What is a Farmers Risk Assessment Indicator? A Farmers Risk Assessment Indicator is a score based on credit report information. Depending on the kind of policy, Farmers' underwriters may use the resulting indicator along with motor vehicle records, loss reports and other application information to evaluate Auto and Homeowner insurance policies. It helps answer the question, "If we accept this applicant or renew this policy, will we likely be exposed to more losses than our collected premiums will allow us to handle?" Where do Risk Assessment Indicators Come From? Risk Assessment Indicators are based on information from consumer credit reports that insurers get from one or more of the three major credits bureaus: Equifax, Experian (formerly known as TRW), and Trans Union. Information used in coding includes:
What's Not Included in a Risk Assessment Indicator? Insurance Bureau Scores do not use the following information:
How Can I Find Out My Risk Assessment Indicator? Farmers understands that your privacy is important to you. While your Farmers Agent can tell you what your indicator is, no one at Farmers, including your agent or any member of your agent's staff, has access to actual credit history file. Your credit report is available from the credit bureau that provides the information used to develop your Risk Assessment Indicator. Can I Improve My Indicator and, if so, How? You may be able to improve your indicator over time by using credit responsibly. A Risk Assessment Indicator is a snapshot of your insurance risk picture based on information in your credit report that reflects your credit payment patterns over time, with more emphasis on recent information. To improve an indicator, Fair, Isaac & Company recommends that you should:
It's also a good idea to periodically obtain a copy of your credit report from the three major credit bureaus to check for any inaccuracies. What if I am Turned Down for Insurance or My Premium Increases as a Result of My Indicator? The Federal Fair Credit Reporting Act (FCRA) requires that we tell you if we take adverse action based, in whole or in part, on information contained in your credit report. We must give you the name of the credit bureau that provided the information and advise you of certain rights that you have under the FCRA so you can challenge any errors that might appear on your credit report. What if the Information in my Credit Report is Wrong? If you find an error in your credit report, you should report the error to the credit bureau. The credit bureau must investigate and respond to your request. If you are in the process of applying for an insurance policy, you should immediately notify Farmers about any incorrect information in your report. Small errors may have little or no effect on the Farmers Risk Assessment Indicator. If there are errors, the credit bureau will send Farmers a new score, once they are corrected. When the credit bureau reports the new score, Farmers will consider the new score. Make sure the information in your credit report is correct by reviewing your credit report from each agency at least once a year. Call these numbers to order a copy (a fee may be required):
How much will Auto Insurance cost? It depends on what you drive Did you know one of the biggest expenses in
owning a car or truck is the cost of insuring it? The car you drive can have a
substantial impact on your auto insurance premium, especially on your
comprehensive and collision coverage's. Your Farmers agent can help you by
letting you know which vehicles are better insurance values. The rates for comprehensive and collision
coverage are determined by looking at the vehicle loss history - how often it is
stolen, how costly it is to repair or replace after an accident. Farmers offers
more favorable rates on comprehensive and collision insurance for over 119
popular selling vehicles. That means if you really want to get a good value for
your insurance dollar, choose a car on this list. As an additional benefit,
these vehicles are often safer, less expensive to repair and less likely to be
stolen. Are you in the market for a new or used
vehicle? We have more
helpful advice to guide you through the auto buying
process! At Farmers, we understand you want the best service and protection at a
price to fit your budget. Check out these
discounts and then contact your local
Farmers Agent It depends on the deductible How much deductible should you carry on your
auto insurance? Your Farmers agent can help
you decide what the right deductible is for your situation. Remember: The higher the deductible, the lower
the premium - but the more you'll pay out of pocket in case of a claim. The
lower the deductible, the higher the premium - but the less you'll pay if you
have an insured claim. Are you getting all the discounts you
deserve? Farmers offers many
discounts to help keep your
auto insurance premiums as low as possible. Contact your local Farmers agent to
discuss your own individual needs. Farmers unique HelpPoint service We know that a fire, accident or burglary can
turn your world upside down. But as a Farmers customer you can call our unique
HelpPoint service at 1-800-435-7764. Call us immediately! 24 hours a day, seven days
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