Frequently asked questions

Penn National Insurance understands that buying insurance can be confusing. That is why we sell through independent agents, who offer our customers the best source of personal consultation. Our agents possess a wealth of insurance knowledge and are ready to answer your toughest insurance questions. Here are some of the questions that our agents frequently encounter, and their responses. These questions and answers offer you general information, and you should consult with your independent agent for specific advice that matches your personal situation.

What will cause my auto insurance premium to increase?

A number of factors come into play when Penn National Insurance calculates your auto insurance premium. Many of the factors are changes you may make:

• Increasing coverages such as Bodily Injury and Property Damage Liability, Medical Payment and Personal Injury Protection options
• Lowering your deductibles for collision and other than collision coverages
• Changing the use of your vehicle
• Adding a new driver, particularly one that is young or a driver with limited driving experience
• Moving to an area where insurance rates are higher
• Purchasing a new vehicle and adding it to the policy
• Accidents or moving violations

Additionally, insurance companies can be given approval by their state Department of Insurance for a rate increase. This could occur because the company has measured higher losses among the customers that it insures, or because of other rising costs of doing business.

When I rent a car, do I need to buy the collision insurance offered by the rental car agency?

If you carry collision coverage on your Penn National Insurance auto policy, this coverage extends to any car you rent, either in the United States and Canada (no coverage outside the US and Canada, however). Even so, you may choose to buy the rental company’s coverage, if the cost of the physical damage coverage from the rental agency is less than your collision deductible. This makes very good sense if the rental company’s coverage offers you zero-deductible coverage—meaning you won’t pay a dime for repairs if you crash the vehicle. In many cases, however, it might not make sense for you to buy the coverage. To decide, talk to your independent agent.

Sometimes I hear insureds say their credit card companies offer them insurance on cars they rent. This may be true to some extent, but I advise my clients to take a few minutes to read the fine print—there are often numerous restrictions limiting the coverage offered. The coverage may not be available to all cardholders or the coverage may only reimburse you for your deductible.

The best course of action is to read the fine print of any proposed insurance contract and make a quick call to your Penn National Insurance agent to get any clarifications you may need.

My daughter is leaving for college in a few weeks and wants to take a car with her. She’s listed on our family policy, but goes to school in another state. Will she still be covered?

Since your daughter is already listed as a driver on your policy and is still technically a member of your household, she can remain on your policy. However, you do need to let your agent know that the car is being kept at a different location. This could alter your premium, either up or down, depending on the location.

If you decide not to let your daughter take the car to school with her, your premium could decrease. This is because the car will not be driven as frequently by a younger driver (younger drivers are classified as high risk, and your premium reflects this).

As you should do before making any insurance coverage decisions, talk things over with your Penn National Insurance independent agent before making a final decision.

I just graduated from college and started my first job. This is my first time on my own, and I’m not sure what kind of auto insurance coverage I need. What do you recommend?

It’s important to be sure you have adequate coverage as you begin this new stage of your life, but it’s also important to understand what you truly need and weigh the cost of insurance versus the coverage you need. To learn about the primary components of an auto policy, take a look at the ABCs of Auto Insurance listed on the Penn National Insurance Web site, and talk to your independent agent.

Most twenty-somethings don’t have many assets that could be threatened by lawsuits resulting from an insurance claim. If this is true in your case, you might have adequate protection by purchasing the minimum levels of liability coverage required by your state. However, a large claim now could have an impact on your future earnings and assets. A court could award attachments of your future earnings and assets if you do not have enough insurance to cover a large claim that you caused. Again, this is a very important financial decision, and you should not make it alone. Consult with your independent agent.

Also, think about the risk you are willing to assume if your car is damaged in a collision or if you make a comprehensive claim (for instance, if your windshield is cracked or your car is stolen). If your car is older and worth less than $1,500, you might decide not to pay for collision and comprehensive insurance. If you choose to buy the coverage, you might want to carry higher deductibles to reduce the cost of the insurance. Remember, though, increasing your deductibles means that you will pay more out-of-pocket expenses when you file a claim. Again, these are very important financial decisions. Make sure you consult with your independent agent.

Selecting what coverages to carry is a personal and often challenging decision. Your Penn National Insurance agent can help you weigh the pros and cons of buying different levels of insurance protection. Remember, although you may choose to keep things simple right now, be sure to reevaluate your insurance needs annually, particularly if you get married, buy a different vehicle, or build your assets.

My wife and I are considering leasing our next vehicle, instead of purchasing it. Are there any insurance issues specifically affecting a leased vehicle?

The best thing you can do when leasing a car is to read the fine print. Most leases will require that you buy more liability insurance than your state’s minimum requirements and that you carry both comprehensive and collision coverage for the vehicle. Some lease agreements will limit the level of deductible you can carry.

You may already be carrying acceptable limits. On the other hand, if you have to increase coverage from current limits, be prepared for an increase in premium.

One important consideration is whether or not your lease agreement offers gap coverage. This is special coverage that will pay the remainder of what you owe on the lease if you are in an accident and total the car. If gap insurance is not included in your lease agreement, talk to your Penn National Insurance agent about your best options. You should consult with your independent agent about all aspects of insuring a leased vehicle.

If you have an accident in a leased vehicle, be careful when you get the car repaired. Because you need to return the vehicle in the same condition you received it, be sure that the repair shop uses original equipment manufacturer (OEM) parts, that the paint matches and tires are the same.

I am getting ready to buy a new car. Do I need to have auto insurance before I buy?

Yes. Before the dealer hands over the keys, you’ll be required to show proof of insurance. If this is the first car you’ve ever owned and you have not been carrying auto insurance of your own, you’ll need to buy an auto insurance policy. If you have an existing auto policy, your new car will be covered under the policy for a limited period of time and for limited coverages It is your responsibility to talk to your Penn National Insurance agent within 14 days in most states to change your policy to officially add the new vehicle to your policy.

Because you are making a substantial financial commitment in buying your vehicle, the best thing to do is to contact your agent immediately to be sure you have adequate coverage. Generally, people carry more insurance protection on newer vehicles than on older ones. Your Penn National Insurance agent can help you determine appropriate levels of coverage for your new vehicle.

I am confused by the difference between full tort and limited tort [Question applies to Pennsylvania].

Sure. In some states, you can choose either a full tort or limited tort option that applies to bodily injury liability coverage. The limited tort option was designed to reduce the number of costly pain-and-suffering lawsuits.

If you select the limited tort option, you can recover out-of-pocket medical expenses, but you cannot sue a negligent party for non-monetary damages or pain and suffering, unless they are deemed serious—death, serious impairment of a bodily function, or permanent serious disfigurement. If you choose the full tort option, you keep your full rights to sue a negligent party for pain and suffering.

Carrying the limited tort option will generally result in a premium savings. Your Penn National Insurance agent can calculate the difference for you. Choosing between full tort and limited tort is an individual decision, based on your willingness to give up your ability to sue. Make sure you consult with your independent agent on this very important coverage decision.

I just had my first accident in 15 years of driving. I was at fault in the accident. Will this raise my auto insurance premium?

Because you were at fault, your premium will probably increase, although Penn National Insurance’s first accident forgiveness program might apply.

Statistics show that drivers who have an accident are more likely than other drivers to have another.

After three years, this accident will no longer be counted against you and any surcharge resulting from this accident will be removed. Your Penn National Insurance agent will be able to tell you specifically how your premium might change.