Guide to Auto Insurance

Your car is an essential part of your daily routine. Whether you're running errands, driving to work or planning a road trip with family or friends, you depend on your vehicle to get you where you're going - and do so safely. When the unexpected happens, you can count on us to help get you back on track.

What's covered?

Your auto policy covers vehicles you own that are listed on the policy. In most cases, cars you rent or borrow are also covered. Cars that you own, but do not list on the policy, are usually not covered.

Who is covered?

Your personal auto policy covers you, your spouse, and any relatives who live in your home. Anyone else who drives your cars with your permission is also covered. Some policies cover wards in your care, and many policies extend coverage to full-time college students away from home. You can see why insurance companies ask so many questions about who lives in you household!

How is my premium determined?

There are hundreds of factors that go into the calculation of your premium. Some are obvious, like your past driving record, age, claim history, and coverage choices. Some are less obvious, like your insurance score, your choice of payment plans, marital status, ratio of vehicles to drivers in the household. Here are some of the factors that affect the price of your insurance:

Where you live - City rates are usually higher than rural and suburban rates. Each territory has its own rate factor, which can vary widely by company.

Use of the vehicle - Pleasure use and short commutes get the lowest rates, while business use and longer commutes are more expensive.

Age - Teenagers still pay the highest rates. Most companies have different rate factors for every age group, with the lowest rates for people in their 40s and 50s. Rates tend to rise again after age 65 or 70.

Marital status - Married people usually have lower rates.

Vehicle - Your choice of vehicle makes a big difference, but it's not just the cost of the vehicle that gets taken into consideration. Crashworthiness is a factor, as are safety devices like air bags and antilock brakes. Also, the past claim history of each individual model is considered.

Vehicle age - Generally, the older the vehicle, the lower the price.

Safety features - Anti-lock brakes, air bags, anti-theft devices, and daytime running lights can all save you money on your auto insurance.

Annual mileage - Erie Insurance gives a price break for vehicles driven under 8,500 miles per year.

Number of drivers vs. number of vehicles - Some companies factor in the ratio of drivers to vehicles - the more drivers, the higher the premium.

Coverages - Your choice of limits, whether to carry collision coverage and deductible options all affect your premium.

What's an "Insurance Score"?

Most insurance companies are now using insurance scores as a factor in determining rates for auto and sometimes home insurance. The formulas, which vary by company, use information from your credit history to establish an insurance score for you. Based on this score, you are assigned to a tier or rating group.

Insurance scores are different than credit scores. Insurance scores use only those factors from your credit history that show a direct correlation to future claim potential. Insurance scores generally do not consider income, assets, or total debt.

How to save money

Driving carefully and choosing a safe vehicle are the best ways to keep your insurance premium down over the long run. Here are some other tips:

Higher deductibles - take as high a deductible as you can reasonably afford to cover. You will save on your premium, and you will be less tempted to turn in little claims that can count against your driving record.

Defensive driver courses - You can save 10% on liability and collision premiums by taking an approved accident prevention course.

Multi-car discount - Most companies require you to insure all your vehicles with them, but the reward is a discount of as much as 20% on each vehicle.

Multi-policy discount - You can also save by insuring both your auto and home with the same company (if you are a renter, the savings on your auto policy can offset half or more of the renters policy cost).

Pay-in-full discount - With both Erie Insurance and Drive Insurance, paying your premium in full earns you a substantial discount.

First accident forgiveness - Erie Insurance does not surcharge for your first accident, as long as you have been with them for at least three years.

Coverage specifics/how much coverage?

Liability - Provides coverage against lawsuits resulting from injuries or damage you cause in an accident. You can purchase "split limits," such as $100,000 per person injured/$300,000 per accident/$50,000 for property damage. A simpler and more flexible choice is "combined single limit," which provides one limit for all injuries and damage per accident (typically $300,000 or $500,000).

Uninsured/Underinsured Motorists - Provides coverage when someone that hits you doesn't have sufficient liability insurance to cover the injuries to anyone in your vehicle. The basic limit is usually $50,000, but many people increase this coverage to match their own liability limit.

Personal Injury Protection - This is what many people call "no-fault". It covers medical expenses and lost wages for anyone injured while in your car, regardless of who is at fault. The basic limit in New York is $50,000 per person, but we recommend the maximum $175,000 in most cases.

Collision - Provides coverage when your vehicle is damaged in a collision. A deductible applies, typically $500.

Comprehensive (or "other than collision") - Provides coverage when your vehicle is stolen or damaged by something other than collision, such as fire, vandalism, flood, or hitting a deer. A deductible applies.

"Full Glass" - This is part of the "comprehensive" coverage. It eliminates the deductible for breakage of window glass.

Rental Reimbursement - Covers the cost to rent a replacement vehicle when your vehicle is involved in a collision or comprehensive claim. The limit is a daily amount of coverage with a maximum per claim (The basic limit with Erie Insurance is 20 per day, but this can be increased.)

Road Service (or "towing and labor") - Provides coverage for emergency towing and labor costs when your vehicle is disabled. Most companies limit coverage, but Erie Insurance pays any reasonable charge.

Youthful operators

When do I add teenage drivers to my policy?

Most companies start charging when your child gets a license. Even if you forget to tell us right away, the companies still charge you back to the date of licensing. These rules change from time to time, so it's a good idea to give us a call when your child gets a permit.

Should my teenage children have their own insurance?

As far as cost is concerned, it is usually less expensive to add children to the parents' policy. They get the benefit of multi-car discounts and the parents' preferred pricing tiers.

There are valid reasons why some parents prefer to have children on their own policies. First, it develops responsibility for them to pay for their own vehicle and insurance. Also, you can choose different limits and deductibles that may be more appropriate. There may also be a legal benefit in protecting the parents' assets if the car is in the child's name.

Important note: This guide is an overview of the major coverages to be provided. Your coverage will be controlled by the specific terms and conditions of your policy. Please be sure to read your policy for limits, exclusions, and conditions that apply.