Progressive Auto Insurance FAQ's

Progressive Auto Insurance FAQ's

FAQ (Frequently Asked Questions) that can help you learn more about a car insurance policy and common procedures.

1.  If I let a friend borrow my car, is he/she covered under my automobile insurance policy?
2. What is no fault insurance?
3. What do I gain or lose by giving up my tort rights?
4. What does my policy cover when I rent a car?
5. Why is insurance sometimes referred to as a "packaged policy?" What are the parts of the package?
6.  I have an older car and its current market value is very low - do I really need to purchase automobile insurance?
7. Why does the premium for my insurance rise if I have an accident or if I get a ticket?
8. How can I purchase insurance for my motorcycle?
9. What is the difference between collision physical damage coverage & comprehensive physical damage coverage?
10. What should I do if I get into an accident?

---

If I let a friend borrow my car, is he/she covered under my automobile insurance policy?

When you willfully, knowingly loan your car to a friend or associate, he or she will be covered under your policy. In fact, even if you don't give explicit permission each time a person borrows your car, someone will still be protected under your policy as long as they have a reasonable belief that you would have given permission to loan the car.

back to top

What is no fault car insurance?

No fault car insurance is a kind of vehicle coverage by which victims of an auto accident can be compensated by their own insurance provider, no matter who caused the accident. This is different from what happens under the traditional tort system of compensating victims of accidents.

With the tort system, the person(s) who is at fault is required to compensate any victims of the car accident. The idea behind no fault insurance is to keep small claims from being settled in our expensive legal system. To accomplish this aim, no fault insurance restricts the injured party's right to sue the negligent driver in instances where the loss dips below a particular threshold.

Two types of thresholds are typically used:

verbal thresholds

Uses a written description to determine when the injured party regains his/her right to sue. For instance, someone may regain tort rights if an accident caused a serious handicap, such as the permanent loss of a bodily ability.

dollar thresholds

A dollar threshold proscribes a dollar limit that a claim must reach before the injured person regains his or her tort rights.

back to top

What do I gain or lose by giving up my tort rights?

Advocates of no fault car insurance argue policy owners gain several things by giving up their right to sue in minor accidents. For example, under no fault insurance you typically pay lower automobile insurance premiums, collect claims payments faster, and spend less time in court. The biggest thing you lose by giving up your right to sue is the ability to collect payments for pain and suffering. No fault insurance only pays your direct economic losses, such as hospital bills, lost wages, etc. It doesn't compensate you for any pain and suffering damages you may incur from an accident.

Yet, in most serious accidents, where the likelihood of incurring these non-economic losses is greatest, you regain tort rights and the ability to sue the negligent party for pain and suffering.

back to top

What does my auto insurance policy cover when I rent a car?

This is a complicated question. In the recent past, most auto insurance policies would extend coverage to rental cars whenever you rented one. This isn't the case anymore.

Most of the time, your personal auto insurance policy will cover only vacation car rentals. Many insurance companies no longer extend personal auto insurance coverage for business travel. To find out what rental car coverage you have under your policy, call your insurance agent or company.

back to top

Why is car insurance sometimes referred to as a packaged policy? What are the parts of the package?

Several decades ago, if you wanted to purchase all the coverage today's auto insurance policy provides, you would have had to buy at least for separate policies. Modifications in laws that regulate the sale of insurance now allow the insurance industry to sell policies that combine the separate parts into one all-encompassing policy.

The primary advantages of combining the parts are:

lower expenses, and therefore a

lower cost to consumers

and the convenience of being able to buy property, auto liability and other types of coverage in a single policy

Part A of an auto insurance policy is liability coverage that protects you from lawsuits because of either negligent operation or ownership of a covered automobile. There are two types of coverage in Part A: bodily injury liability (BIL), and property damage liability (PDL).

BIL covers the bodily injury claims of people you injure in an accident because of negligence.

PDL covers any third party property damage claims the courts decide you must pay.

Part B provides medical payments to you and any other people in the car in an accident.

Part C provides uninsured motorist and underinsured motorist protection for the policy owner.

Both B and C are designed to compensate you when the negligent driver does not have enough liability insurance under his or her policy. usually, Part C covers only bodily injury losses, but property damage losses are included in some states.

Part D covers damages to your car when it's in an accident.

back to top

I have an older car and its current market value is very low - do I really need to purchase automobile insurance?

Almost all states have brought about compulsory car insurance laws that require drivers to have at least some auto liability insurance (Part A). Such laws were passed to ensure that victims of accidents are compensated when their losses are caused by someone else being negligent.

Besides the minimum liability you may be required to purchase, many people with older cars decide not to purchase physical damage coverage. Often, the cost of repairing an older car is greater than its value. In these cases, your insurer will usually just "total" the vehicle and give you a check for its market value less minus the deductible.

Many people forgo the Part D coverage because of the relatively low value of their automobiles.

back to top

Why does the premium for my car insurance rise if I have an accident or get a ticket?

Statisticians who compute auto insurance risks and premiums, or actuaries, have studied the behavior of people involved in accidents and have shown that people who have either had an accident or received a ticket recently are more likely to have another accident in the next couple of years than people whose recent driving record has been free of incidents.

Insurance companies use this information to punish people, but rather to charge them a premium that reflects their likelihood of having an accident. Those who are more likely to have an accident should expect to pay a higher premium.

back to top

How can I purchase vehicle insurance for my motorcycle?

In order to get your motorcycle insured, you may add a miscellaneous-type vehicle endorsement to your existing auto insurance policy. This will also cover mopeds, motor homes, dune buggies and other vehicles.

back to top

What is the difference between collision physical damage coverage & comprehensive physical damage coverage?

Collision and comprehensive coverage are both in Part D.

Collision is defined as -

losses you take when your auto collides with another car or object. For instance, if you hit a car in a parking lot, damages to your car will be paid under your collision insurance. It covers most other direct physical damage losses, such as damage to your car from a hailstorm. It will be covered under comprehensive coverage.

It’s important to understand the differences between collision and comprehensive coverage to make an informed buying decision. Keep in mind that your deductibles in these two categories often differ.

back to top

What should I do if I get into an car accident?

Your obligations after you have an accident are proscribed both by state law and your insurance contract. Clearly, the first thing you should do is be sure everyone is all right and call an ambulance immediately if needed.

Second, for most accidents in most states, the police should be alerted.

Third, give the other driver(s) involved your name, address, telephone number, and the name of your insurance provider and/or your insurance agent. Get this same information from the other party.

Fourth, as soon as possible, contact either your insurance agent or your insurance company to notify them that you have been involved in an auto accident.

Lastly, there are requirements in the insurance contract that you must satisfy to receive compensation from your insurer. For example, you must cooperate with your insurer during any investigation during the claims settlement process.

Not fulfilling any of these obligations can result in nonpayment by your insurance provider for losses that otherwise would have been compensated for.

Return to Progressive Auto Insurance Questions