Car Insurance -- Clarifying It

When you buy car insurance, you enter into a contract with the insurance company. Under the contract, the insurance company agrees to pay your losses if your car meets with an accident. In exchange, you agree to pay the premium.

Car insurance provides property, liability and medical coverage. Damages or theft to your car are paid by property coverage. The liability coverage will pay for your legal responsibility for bodily injury or property damage caused by your car.

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

Majority of the car insurance policies are valid for six months to a year. When the validity is over, you must renew the policy.

All states require you to have some form of car insurance if you own or operate a car.

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Different states have different penalties for driving a car without insurance. In some states, your car will be impounded. Heavy fines are imposed in some states. You could be in serious trouble if you car is involved in an accident without insurance. You will be financially responsible for paying for any injuries or damages out of your own pocket.

The insurance company will consider your credit history, the age and type of your car before offering you a rate.

You are responsible for providing insurance for any car you own regardless of who is operating the car. Your car will be operating illegally if it does not have insurance.

Finally, a few savings tips...

1. Although this may sound funny, you can bring down your rates by getting married. I know you won't get married just for this but when you do, it will save you a bit in auto insurance. 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. If you want to keep your rates down, do NOT "pimp your ride." Doing such reduces your car's safety and, therefore, warrants higher rates as far as the insurer is concerned.

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. Homes in the same neighborhood may fall under different risk zones as far as your insurer is concerned.

So check with your agent before you commit to a new home. 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. Remember, they look for easy targets. An unlocked car with the engine running? What could be easier?

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5. Using your parents' car insurance policy is an option for you an under twenty five. Your parents are part of a better risk age group.

To take advantage of this though, you will have to live with your parents and also have the car registered in their name. This means that they legally own the car. If the benefits of "independence" outweigh your auto insurance savings then this is certainly not an option for you.

6. You can save much money in auto insurance if you obtain and compare auto insurance quotes from insurance quotes sites. You will make savings if you use just one quotes site. But, you will get more by using at least five.

The simple logic in this is that you'll get many more auto insurance quotes from a wider range of insurers. This raises your chances of getting better quotes.
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