Car Insurance -- Things You Need To Understand

By buying a car insurance policy, you are entering into a contact with the insurance company. If your car meets with an accident, you will be eligible for compensation for the losses under the contract. Paying the premium is your obligation under the contract.

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.

Most car insurance policies are valid for six month to a 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 is different in different states. In some states, your car will be impounded. There are heavy fines in some states. If your car is involved in an accident without insurance, the consequences can be serious. 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 will play an important role in determining the rate you have to pay for car insurance.

It is your responsibility to provide insurance for any car you own regardless of who is operating the vehicle. If you operate a car without insurance, you will be in violating the law.

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. It's commonsense that every person becomes more stable and less reckless once they get married. This stability affects such a person for good when he/she is behind wheels. 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. Doing such reduces your car's safety and, therefore, warrants higher rates as far as the insurer is concerned. So if you're really serious about keeping your rate down, leave your car the way it was manufactured.

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.

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. I know: That isn't usually an issue when you're looking for a home but it's really important.

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 simple act makes it very easy for thieves. 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. An option for you is to use your parents' car insurance policy. The fact that you're of driving age means that your parents belong to a better risk age group.

There are two things you must do to make this possible: The vehicle must be registered in your parents' name and you must live with them. 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 will have to forget this alternative.

6. You can realize savings of hundreds of dollars on your auto insurance policy by obtaining insurance quotes from insurance quotes sites. The best strategy is to visit not less than five quotes sites and making sure that you give the same (correct) information about yourself.

I advise that you use not less than five quotes sites as that will make it less likely that you'll miss out better quotes not carried by the other sites. This gives you a broader basis for doing more extensive comparisons thereby increasing your chances of getting more for less.
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