Q: What kinds of questions should I be expected to answer when I am applying for an insurance policy? Why do insurers need so much information?

A: When you apply for an insurance policy, you will be asked a number of questions. For example, the agent might ask your name, age, gender, address, etc. In addition, you will be asked a number of other questions which will be used to determine how likely you are to make a claim.

When an insurance company is deciding whether or not to offer automobile insurance to a potential customer, it will want to know about the person's previous driving record, whether they have any recent accidents or tickets, and what type of car is to be insured.

Insurance companies have different programs for different customers. Adults with good driving records will generally pay less for auto insurance than will a young driver with traffic tickets. In order to determine which program you qualify for, an insurance company needs basic information about you.

In addition to your age, gender and driving experience, information about the vehicle you drive, and how you drive it, is also needed to determine a fair price. For example, a large luxury car costs more to repair or replace than a sub-compact, and someone who commutes 30 miles each way is more likely to be in an accident than someone who rides the bus to work and drives only on weekends.

Personal information such as your drivers license number and social security number may be necessary to complete an accurate quote. Most insurance companies now verify your claims history, driving record and credit score prior to providing the best available quote for your particular situation. This information is kept confidential and is not shared with other people.

The credit score is a number devised by the insurance industry which takes into account your past payment history, current indebtedness and other less significent factors. Lower scores can limit the availability of competively priced insurance coverage as it is a statistical indicator of a greater potential for claims frequency and severity. Q: What are the advantages to using an agent to purchase insurance?

A: By using an agent to purchase insurance, the policyholder receives more personal service. An agent with whom there is direct contact can be vital when purchasing a product and absolutely necessary when filing a claim. A local, independent agent is able to deliver quality insurance with competitive pricing and local, personalized service.

Q: What factors can affect the costs of my automobile insurance?

A: A number of factors can affect the cost of your automobile insurance, some of which you can control and some that are beyond your control.

The type of car you drive, the purpose the car serves, your driving record, your age, your marital status, your sex and where the car is garaged can all affect how much your automobile insurance will cost you.

Statistics play a major role in determining automobile insurance rates and statistics show the young drivers have the highest frequency of accidents. Thus young unmarried males will have a higher auto premium, while married middle-aged individuals will have preferred rates.

Q: What are some practical things I can do to lower my automobile insurance rates?

A: There are a number of things you can do to lower the cost of your automobile insurance. The easiest thing to do is ask us to get quotes from several companies for you.

Another way to lower the cost of your automobile insurance is to look for any discounts for which you may qualify. For example, many insurers will offer you a discount if you insure multiple cars under the same policy. The following are just some of the major discounts that are available with some of the companies we represent:

• Multi-car discount
• Multi-policy discount - usually applies when you insure your home and auto with the same company
• Good student discount
• Senior driver accident prevention course completion
• Air bag discount
• Anti-theft discount
• Safe driver discount (ticket & accident free)

Another easy way to lower the cost of your automobile insurance is to increase the deductible. Simply raising your deductible from $250.00 to $500.00 can lower your premium sometimes by as much as ten percent.

Q: Suppose I lend my car to a friend, is he/she covered under my automobile insurance policy?

A: Whenever you knowingly loan your car to a friend or an associate, he or she will be covered under your automobile insurance policy. The coverage follows the vehicle not the dirver and if an accident should occur the payment of a claim could cause an increase in your premium if it is deemed to be a chargeable accident.

Q: I have an older car whose current market value is very low, do I really need to purchase automobile insurance?

A: Minnesota insurance laws require drivers to have automobile liability insurance. These laws were enacted to ensure that victims of automobile accidents receive compensation when their losses are caused by the actions of another individual who was negligent. With older cars it is often prudent to eliminate coverage for comprehensive and collision, as the value of the vehicle is minimal in relation to the cost of the coverage, but liability coverage is still required.

Q: What is the difference between collision physical damage coverage and comprehensive physical damage coverage?

A: Collision is defined as losses you incur when your automobile collides with another car or object. For example, if you hit a car in a parking lot, the damages to your car will be paid under your collision coverage.

Comprehensive provides coverage for most other direct physical damage losses you could incur. Comprehensive is sometimes referred to as coverage for acts of God that you don't necessarily have control over. Weather related losses including hail as well as wild animal damage (deer hits), glass breakage and theft are all examples of comprehensive coverage.

Q: What should I consider when purchasing automobile insurance?

A: There are a number of factors to consider when purchasing any product or service, and insurance is no different. Here is a checklist of things you should consider when purchasing automobile insurance.

1. Base your decision on value. This is more than simply the lowest price. You are paying for an intangible probuct and thus you should seriously consider the integrity and potential for quality service from the agent and insurance company that you select. Future policy changes and claims require prompt courteous and professional service. Independent agents, and the companies we represent, deliver excellent value.


2. Purchase the amount of liability coverage that makes sense to you. Analyze your particular situation relative to your financial and economical situation. Do you have perceived wealth? Do you have any young drivers who are just starting to drive? Do you own your own business? If you said yes to any of these questions you may want to consider higher levels of liability coverage to protect you against a large loss, which could jeopardize your lifelong earnings and asset accumulation.


3. You should decide which optional coverage's you want. For example, do you want optional physical damage coverage's or is the market value of your car too low to warrant purchasing them.


4. Once you have decided what you want in your automobile insurance policy, you can decide from whom you would like to purchase the insurance.