How auto insurance is different from state to state, when it’s OK to drive between states, and when it’s time to switch your state coverage.

Got auto insurance? You need not fear this sign.

In the United States, auto insurance is necessarily a state-level concern. Each state has its own laws. But this begs the question:

If you drive to another state are you still covered?

Fortunately the good news for road trippers everywhere is that answer is a resounding “yes” … probably.

Know Your State Limits

State minimum liability coverages vary rather dramatically. They range from a paltry 10/20/5 in Mississippi (that is, in a single accident $10,000 for bodily injury to one person, $20,000 for bodily injury to any group of people, and $5,000 for property damage) to a somewhat more substantial 50/100/25 in Maine. Several states other than Mississippi, including California, Massachusetts and New Jersey, still only require $5,000 in property damage coverage. Seriously, when was the last time a new car cost $5,000 anywhere?

To address this most policies have a built-in “out of state coverage” which automatically covers you at state minimums in another state should those minimums be above your policy. Before driving out of state, and especially if you live in a state with low liability requirements, check with your insurance agent to verify this coverage before crossing the border. Chances are you’re fine, but it doesn’t hurt to check.

Note if you carry liability and corresponding uninsured and underinsured (UM/UIM) limits of at least 50/100/50 – which many insurance professionals recommend in the first place regardless of what state you live in – you satisfy even the toughest state legal requirements for auto insurance, thereby rendering the issue irrelevant. The bottom line is given adequate coverage, if you’re in another state and just visiting you’re good to go.

When to Switch Insurance Between States

The general rule is you should carry your auto insurance in the same state your vehicle is registered in. Indeed, many states including Nevada and Florida require you to purchase in-state auto insurance before you register your vehicle. Most states require you switch your registration within 90 days of moving.

If you’re staying with the same company, switching insurance should be a rather seamless process. However only the largest insurance companies are active nationwide, and even some of them aren’t in all 50 states. For example Farmers Insurance is a major, established auto insurer in the western states, but has a much smaller presence on the east coast.

If you are switching companies either by choice or by necessity after moving to a new state, be sure to notify your old insurance agent of your cancellation date as soon as possible so you can be properly credited for any unused premium.

A Temporary State? Better Stay Where You Are

When it comes to picking up and moving to a new state, switching auto insurance should be a no-brainer. However, there can be a considerable gray area when it comes to a temporary move such as for college, especially if you don’t intend the move to be permanent.

The quandary is, while actually in school is a college student considered a resident of his home state, or the state where he or she is in college? In many cases as far as the insurance company is concerned the answer is the latter, particularly if that company isn’t licensed in the state where the school is.

While switching insurance can result in the student losing discounts associated with being on the family policy, sometimes it’s the only way to stay covered. Check with your agent to see how such a situation applies to you before you find yourself in a particularly nasty claim dispute.

How to avoid inaccurate quotes by providing specific information, verifying your driving record, and running your credit check sooner than later.

When quoting auto insurance, there's no such thing as TMI.

Have you ever been given a quote for auto insurance only to find that when the policy is written the premium is nowhere close to what you were told?

This happens to a lot of people, and often times it’s because the insurance company found information which wasn’t provided but ultimately had a profound impact on the price. Doing your homework before shopping for insurance quotes can save you money – and a big headache – later on.

Basic Information for an Insurance Quote

Getting the best auto insurance quote relies entirely on the information provided. While it should be obvious to provide basic information on drivers and vehicles, some other bits of information may not be. For example, knowing how many miles you drive to work one-way or what ZIP code your car is parked in can make a difference as well.

While year, make and model of your vehicle is sufficient to run a quote, providing the full VIN during the can uncover some sometimes surprising differences. In addition to identifying your specific vehicle, a VIN also provides detailed information regarding your vehicle’s specifications. While not terribly common, there can be significant differences in insurance ratings between nearly-identical vehicles. If that’s the case with you, a quote using a VIN will identify the issue right away.

Also make sure you’re quoting the same liability and full coverage levels from company to company. Insurance agents call it “comparing apples to apples,” and it’s important.

Check your Driving Record Before Quoting

When looking for the best quote it’s better to have too much information than not enough when it comes to tickets, accidents and claims. List all accidents, tickets and claims you’ve incurred in the last five years, no matter how trivial you think they may be. While some companies will look at the full five-year history, others may only be interested in the last three years. Also, not all companies look at the same things. This can potentially result in a substantial difference in quoted premiums.

Many states provide online driving histories on their DMV web sites for a small fee. If you need to refresh your memory on things that happened several years ago, this can be a good resource.

But you don’t have to do that.

Instead, have an insurance agent run a full driving history profile on you. These histories not only include tickets, but also include claim information that won’t be found in state DMV databases. These are also the reports that insurance companies use when rating their auto insurance policies. Knowing what’s on the source documents definitely helps.

These driving history reports can and do have occasional errors. Don’t be afraid to ask your agent for a copy of this report and point out any problems. A good agent will work with you to ensure any negative, erroneous information is disregarded by underwriting.

Give Yourself Some Credit

Many insurance companies offer discounts based on credit. While bad credit usually just means there’s no discount, people with particularly good credit can get very substantial discounts of up to 40 percent with many companies. Typically the information needed for a credit score is a full Social Security number and current address.

Keep in mind, credit checks made by insurance companies are not the same as a full credit check made by a bank. Insurance agents don’t have access to or use your standard FICO credit score. Instead the credit score they use for quoting and rating purposes is typically determined by proprietary means. In other words, there’s really no way to determine your credit score from an insurance quote. What information the agent can provide you generally has no relevance outside the insurance company.

While the credit check is not actually necessary until the policy is written and goes to underwriting, getting it done at the quote stage gives you the most accurate quoted premium. In terms of knowing exactly what you’ll pay, running the check sooner than later is far superior to simply saying your credit is “good.”

Who needs fleet insurance, what it covers , how to make sure the right people are on the policy and what it doesn’t cover.

Your fleet doesn’t have to be this big.

You may need fleet insurance even if your “fleet” consists of only one vehicle. More than anything insurance companies place emphasis on how a vehicle is used. Insuring the wrong vehicle for the wrong purpose can result in claim denial.

If you use your car for personal use (which includes driving to and from work, but not use for work-related activities), then you need a standard personal auto insurance policy.

Insure Your Fleet Right

Vehicles specifically used for work purposes should be placed on fleet or commercial auto insurance policies. The vehicle doesn’t have to be a large truck, a service van or any other vehicle specifically designed for commercial use.

It can theoretically be any vehicle. Indeed since he or she uses it to travel to and from appointments, chances are your insurance agent’s own vehicle is covered by a commercial auto policy.

Fleet insurance legal requirements are for the most part the same as for personal auto insurance, however there are exceptions. For example, some states require significantly higher liability limits on taxicabs than on other vehicles. There may also be different rules for commercial concerns that take their vehicles across state lines. Consult with your insurance agent for more information.

Liability insurance on trailers isn’t required because trailers aren’t self-propelling. Instead, the liability coverage on the vehicle towing the trailer typically covers the trailer too. However, trailers must have any comprehensive and collision coverage written separately from other vehicles. In a commercial setting trailers are typically insured on a stated value basis. This is particularly true of older trailers or more simply constructed trailers such as flatbeds.

List Your Drivers in the Fleet

Personal auto insurance policies list drivers, but these policies commonly extend coverage to other occasional drivers without you having to think about it. This isn’t the case with fleet insurance policies. If a driver isn’t listed, there’s no coverage in a claim. Therefore it’s extremely important to make sure your fleet driver lists are kept up-to-date.

On commercial fleet auto insurance policies drivers are typically either accepted or rejected without a whole lot of underwriting. While exact rules vary from company to company for the most part your drivers need to be over 25, properly licensed to drive the vehicle in question and have decent driving records. A ticket or two is usually not a problem, but a particularly poor driving record can disqualify a driver.

Most commercial insurance companies will not accept a driver under 25 on a fleet policy, regardless of record. Drivers over 74 may be categorically rejected as well.

The Vehicle is Only Part of Fleet Coverage

Remember fleet auto insurance only covers vehicles. It generally does not cover tools, equipment, aftermarket accessories or anything else not factory installed and permanently bolted down. Your valuable tools and equipment need to be covered separately from perils such as theft and vandalism.

This is accomplished by another line of commercial property or casualty insurance called “inland marine” insurance. Like trailers, tools and equipment are typically on a stated value basis. In addition to stated value, underwriters will typically want information such as a short description, year of manufacture and any serial numbers to cover tools and equipment.

Fleet auto insurance also does not cover damages caused by you or your employees. Instead, this is addressed by commercial general liability or GL insurance. While not all commercial concerns need GL, many contractors and clients, particularly in construction-related fields, require proof of a GL policy called a “binder” before they will hire you or your company. Your insurance agent can help you find the correct coverages you need to protect yourself on the job.

Why there isn’t a “woman’s discount,” how women can save money on car insurance, and how to best utilize discounts.

Women have the advantage!

While many things in today’s marketplace are geared towards women, the fact is car insurance really isn’t.

While rates among the sexes may not be entirely equal, the auto insurance shopping process by and large is.

One might be tempted to look for auto insurance discounts specifically tailored towards women.

However save yourself the energy: they don’t exist.

An Even Playing Field for Women… sort of

Insurers have to be very careful to tailor their rates and discounts based on tangible statistical data. Giving special discounts to women or making cheap car insurance for women (or to men, for that matter) without any other statistical qualifiers is considered discrimination, and that’s illegal.

That said auto insurance rates for women do tend to be slightly lower than they are for men, all other things equal. This is just as true at age 18 as it is at age 65. The reason for this goes back to statistics. Across the board women are involved in slightly fewer accident and claim situations than men are. Therefore, they pay less in premium. Rest assured the old sexist stereotype of a “woman driver” simply doesn’t wash in the insurance world. If anything, the opposite is true.

Women: Do Your Research

The best way to get cheap car insurance for women is to shop around. Rates from company to company can and do vary a lot, so a little research can do a whole lot of good. When shopping for car insurance, be sure to provide the full VIN for all vehicles, how many miles you drive to work, who drives your vehicle and how many accidents or claims you’ve had in the past five years.

Don’t lie on the latter point, underwriters will find out if you do.

Make sure you quote the same deductibles and liability limits when you shop for auto insurance. A good benchmark to use is a 50/100/50 split limit or $100,000 combined single limit (CSL) for liability, and a $500 collision and $100 comprehensive deductible for full coverage.

Sensible automobiles are cheaper to insure than exotic sports cars. While it may bruise your ego a bit to drive a minivan, at least you can take solace in the fact it’s nowhere near as expensive to insure as a sports car.

Remember different insurance companies look at different things when considering quotes. Too much information is better than not enough.

Ladies Should Look for Discounts

Auto insurance discounts are commonly available for women who bundle insurance coverages with the same company. Insurance carriers routinely offer auto insurance discounts to individuals who buy homeowners or renter’s coverage from them.

Some companies also offer auto insurance discounts with a life insurance purchase. By the way, all things equal women get better life insurance rates than men because – statistically speaking – they tend to live longer.

Many insurance companies offer discounts designed to attract business from young families. For example, some companies offer a “new parent” discount for women (and men) who have small children, typically preschool age or younger. Older drivers can take advantage of discounts by taking defensive driver courses.

What is property damage, what property damage coverage does, it’s limits, and differences from full coverage.

I hope this guy had property damage coverage for his old beater.

Property damage is a fact of life. It’s one of the main reasons insurance exists. But property damage from an insurance company’s point of view might be different than how you understand it.

Insurers are interested in paying back policyholders back for property damage. It’s also called “indemnification”.

Indemnification is the replacement of items lost in a claim in such a manner that the insured neither gains nor loses in the process. Indemnification can come in the form of repairs, a payment equal to the value of the lost item at the time of the claim, or in some cases an actual replacement of the item.

In auto insurance, property damage coverage is inextricably linked to indemnification. As part of auto liability coverage, property damage shouldn’t be confused with full coverage collision and comprehensive insurance coverage. While these coverages ultimately do much the same thing, they are different and apply in different scenarios.

What Property Damage Coverage Does

Property damage auto insurance coverage covers you in an accident if you’re found at fault. In essence, it’s the coverage that fixes the other guy’s car (unless you’re in a no fault state, in which case it helps fix your car).

Property damage coverage can also apply to other tangible assets that could be damaged or destroyed in an auto accident, such as trailers, buildings, road signs or other items.

Yes, if you take out a speed limit sign in an accident, the government entity which owns it could bill you for it.

Property Damage Limits

In a traditional split limit liability insurance setup, property damage is represented by the third number. For example, if you carry a typical state minimum of 25/50/15 on your auto liability insurance, that means you have a maximum of $15,000 in property damage coverage for any single claim.

Given that most new cars are valued well in excess of $15,000 these days, it’s not hard to see how that can pose a problem in anything other than a minor accident. Many insurance professionals recommend carrying property damage coverage of at least $50,000.

If you are able to purchase an umbrella policy via your homeowner’s policy or other means, this can often apply to your auto insurance coverage as well. Umbrella policies provide liability coverage over and above the underlying policy limits.

If you have a $1 million umbrella with your auto insurance, in essence add $1 million to your policy liability limits. Although umbrella policies are relatively inexpensive, often times they need to be applied to underlying policies written by the same company. In addition, these policies need to carry certain underlying limits to qualify. Consult with your agent for more information.

Differences from Full Coverage

In a traditional tort auto insurance state, property damage coverage by definition doesn’t fix your car. Instead it provides for repairs to the other party’s vehicle. Full coverage protection fixes yours. Property damage coverage can help to fix your car in a no fault state, but if you’re found at fault in an accident you may be subject to a premium upcharge at renewal.

Also unlike full coverage, property damage coverage never carries a deductible. The insurance company pays for repairs up to the stated limit amount.