Car Insurance -- Helping You Understand It

Car insurance is a contract between you and the insurance company. Under the contract, if your car meets with an accident, the insurance company must pay for the losses. Your part of the contract is to pay the premium.

Car insurance covers property, liability and medical coverage. Property coverage pays for damage to or theft of your car. If you car causes bodily injury or property damage, the liability coverage pays for your legal responsibility.

The medical coverage will pay for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

The validity of most car insurance policies is six months to one year. When the validity is over, you must renew the policy.

The law in all states require you to have some form of car insurance if you own or operate a car.

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The penalty for driving a car without insurance varies from state to state. Compounding of the car is done is some states. Some states impose heavy fines. Serious trouble. That's what's in store for you if your car is involved in an accident with insurance. You will be financially responsible for paying for any injuries or damages out of your own pocket.

Your credit history, the age and type of your car are also vital factors in determining the rate you have to pay for car insurance.

As the owner of a car, you are responsible for providing insurance for the car, no matter who is operating the car. It is illegal for cars to be operated without insurance.

Finally, a few savings tips...

1. Marriage is something that will do your auto insurance rates a world of good. This is true even though you can't just go off to marry just because of this. There is evidence to show that married people are a lot more stable than their unmarried counterparts. This makes them more careful on the road and, therefore, a better risk to insurers. They generally file fewer claims and when they do, they usually cost less.

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2. "Pimping your ride" does NOT help if you want lower rates. If you want to impress your friends with those extra special features like bigger types than the manufacturer's specification, then be prepared to pay a lot more. Any changes to your vehicle takes your rates up.

3. It's easy to save a few hundred dollars on a home but lose thousands over the years on auto insurance because of its location. Do you know also know that homes within the same neighbor might actually fall into different risk zones according to the insurance industry's mapping?

Therefore, take your time to ask your agent what effect your new zip code would have on your rates before you make that down payment. This doesn't come readily to mind when you're shopping for a new home. Does it?

But think about it: If your new zip code adds up to $300 to your annual auto insurance rate, how much would that amount to at the end of your 30-year mortgage?

4. Never leave your car unlocked and running while you dash in to get something. This is an open invitation to any thief sniffing around. Every thief checks how easy a target is before making a move. It certainly doesn't get easier for a thief than an unlocked car with a running engine.

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5. As an under twenty five, you can pay lower auto insurance rates if you use your parents' policy. The fact that you're of driving age means that your parents are of a lower risk age bracket.

To take advantage of this though, you'll have to live with your parents and also have the car registered in their name. If you do not like the idea of giving the car's ownership to them and other stuff that may come with it, then you'll have to forego this alternative.

6. You can see savings of hundreds of dollars on your auto insurance policy by getting insurance quotes from insurance quotes sites. The best way is to visit not less than five sites and making sure that you give the same (correct) details.

I advise that you visit a minimum of five quotes sites as it will make it less likely that you'll miss out offers not given by the other sites. This gives you a broader basis for doing more thorough comparisons thereby increasing your chances of realizing more savings.
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