Auto Insurance

Personal auto insurance policies only cover personal use claims, including your commute and any travel unrelated to work. Personal policies have lower limits and usually cost less.

However, what happens if you're involved in an accident while driving your personal car for work? In that case, your insurance company may refuse your claim. If you own a vehicle used for work, you should consider commercial auto insurance.

Insurance coverage minimums vary by state. In Texas, drivers are required to carry a policy that, at a minimum, will cover $30,000 for bodily injury liability per person, $60,000 for bodily injury liability per accident, and $25,000 for property damage liability per accident. This covers damage done to other people and property and does not cover damage to your own vehicle. Minimum coverage enables you to drive legally. However, it's a good idea to consider collision and comprehensive.

If you have a loan or are leasing your vehicle, you may be required to carry additional coverages.

Several factors help determine the cost of your policy:

• Level of coverage: The more coverage you carry, the higher the premium

• Deductible: You can choose your deductible, which is the amount you will pay before insurance kicks in. If you have a zero deductible, your premium will be higher; if you have a $1,000 deductible, it will be lower, but you should have that in reserve in case of an accident.

• Your driving record: Most carriers will look at the last three years of your driving record. Accidents and speeding violations will show greater risk; therefore, you will pay more for insurance.

• Your age: Until you reach the age of 25, your age will place you in a higher risk category and a higher premium.

• Cost of your car: The comprehensive portion of an auto policy is based on your vehicle's repair and replacement costs, and the more expensive the car, the higher the premium.

• Your credit: It may not seem relevant, but a good credit score shows financial responsibility and a higher likelihood you will take care of your vehicle, pay your premiums, and be able to cover your deductibles.

• Bundling policies: Insurance companies offer discounts when you carry policies for additional drivers in your household or for your home or property rental. Bundling is often a great way to receive valuable discounts.

• Rental cars: Personal auto insurance policies usually cover you while driving a rental car for personal use. However, if you drive a rental car for business use, your personal policy does not protect you. Rental agencies offer coverage at a higher premium than a standard policy. Check with your insurance agent before renting a car to confirm your coverage.
• Borrowed cars: If you cause an accident while driving a borrowed vehicle, the car owner's insurance policy will cover the claim. If the owner doesn't have insurance or has less than what is required to cover the damage, then your insurance would step in.
  If you do not own a vehicle and borrow a car regularly, you should consider a nonowner liability policy, which covers damage caused to other vehicles or people but does not cover the vehicle you are driving.

• Loaner vehicles: If your car is getting repaired and the shop gives you a loaner vehicle, your liability policy will cover damage done to the loaner vehicle, as well as to other persons and property.