5 Facts to Know about Auto Insurance

Before you go shopping for auto insurance, you need to know some basic facts. This information will help you make good choices when it comes to coverage. Learn these five facts to ensure you get the best policy at the best rate.

1. Factors that Impact Your Rate

You hear a lot about various factors that will make your rates go up and down. Some of them are fiction while others are dependent on the state and even insurance company. A few factors are standard acros the industry:

  • Driving record
  • Where you live
  • Age and gender
  • Marital status
  • Make and model of vehicle
  • Use of vehicle
  • Prior coverage

2. Discounts Reduce Your Premiums

Most insurance companies offer discounts to reduce the cost of premiums. These are viewed as rewards based on where you work, your grades or even your history of safety. Insurance companies can choose their discounts, which is why shopping around can save you money. While they can select which discounts they will provide, they must offer the same rewards to all customers who qualify.

3. How the Rate is Decided

Each insurance company can set up its own rates as long as it meets state regulations and is applied to all customers. The basic idea is the person with the highest risk factors will pay a higher insurance rate. The factors used must be proven to indicate a higher risk. For example, many state allow the company to review a person’s credit to determine risk. Studies have shown that people with lower credit scores file more claims.

4. State Requirements for Coverage

Each state has requirements for minimal coverage that all drivers must carry. Most insurance providers won’t allow you to purchase a plan below that threshold. However, you may purchase more if you feel you need the extra coverage. In addition, your lender may have other requirements you must follow if you are financing your vehicle.

5. You are Responsible for Debts Beyond the Coverage

If you are in an accident and at fault, you may be responsible for debts beyond what your insurance policy covers. Many people don’t realize that the insurance coverage is not the end of their liability. For instance, if an accident is your fault and the medical expenses add up to $150,000 and your coverage is for $100,000, you’re responsible for the other $50,000 out of pocket. It’s important to make sure you carry the right policy to protect your assets and your family.

Take the time to shop around for the best policy and compare more than just the costs. Understand what impacts your insurance rates and what coverage you need to be able to legally drive. Consider what additional coverage is necessary to protect your finances. Learn how to get the best discounts to make your insurance policy more affordable.

When you understand the basic facts about auto insurance, you can make a sound decision on a policy that fits your needs.


ASA Insurance provides excellent coverage for car and home insurance in the Salt Lake City area with the lowest rates to the English and Spanish communities . Affordable rates and superior service for all home, auto and business/commercial insurance needs.

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