Answer: Yes, automobile liability insurance, or proof of financial responsibility is required in all fifty states. Although each state sets their own limits on how much insurance is needed, these are only minimum limits and in most cases additional coverage is needed if you don't want to have to pay additional expenses out of pocket. If you have a lease or loan on your car you are usually required by the lender to have comprehensive and collision coverage in addition to the state required liability coverage.
Answer: Insurance companies evaluate the risks associated with each policyholder to determine if you are a "good risk" or if your policy should be canceled or not renewed. Insurance companies, among other factors, will primarily review your claims, driving, and credit history. It is most favorable that your policy will not be canceled if you don't have a history of filing frequent claims, have maintained a clean driving record and your credit history is good with no bankruptcy's.
Answer: In most cases, yes. Automobile insurance policies require every licensed person in your household to be listed on your insurance policy unless they have a completely separate policy of their own. This includes a teenager who just received their licence or a college student who still uses your address as their residence and/or visits regularly on weekends, vacations, ect.
Answer: Sometimes the value of a car is less than the balance on your car loan. There can be several reasons for this. Interest rate changes may have increased the amount of your loan. Rebates may not have been applied to the purchase price, or poor maintenance of the auto may have reduced its value. The insurance company bases its payments on the actual cash value (ACV) of the car, not the amount of your loan. In some states you may be able to purchase a special type of insurance, known as guaranteed auto protection (GAP), when you buy a car. GAP insurance covers the difference between the ACV and your loan balance.
Answer: Many companies will not insure you if you live with a relative who has a poor driving record. If your teenager has a poor driving record, you may have trouble getting a preferred rate because he or she is defined as an "insured" under your policy.
Some companies will exclude this person by name from the insurance policy. Many companies will not insure anyone in the family unless every driver in the household meets their requirements.