Car Insurance -- Things You Should Know

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.

Property, liability and medical coverage are all covered by car insurance. Property coverage pays for damage to or theft of your car. Your legal responsibility for bodily injury or property damage caused by your car is taken care of by liability coverage.

The cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses are paid by the medical coverage.

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

State laws mandate that your 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. In some states, your car will be impounded. There are heavy fines in some states. You could be in serious trouble if you car is involved in an accident without insurance. You will have to pay out of your own pocket for any injuries or damages.

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

It is your responsibility to provide insurance for any car you own regardless of who is operating the vehicle. It is illegal for cars to be operated without 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. Insurers will tell you that their records show that married people make fewer claims. Furthermore, when they do make those claims, they usually cost less on the average than those married by their unmarried counterparts.

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2. If you want to keep your rates down, do NOT "pimp your ride." 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. Do you know that some folks are paying much more in auto insurance because of where their homes are? 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. I know: That isn't usually an issue when you're looking for a home but it's really important.

Since you may live in the same home for decades to come, a difference of $200 in auto insurance rates would amount to thousands over the years.

4. Never leave your car unlocked and running while you dash in to get something. The only easier thing for a thief would be if you handed over your keys as a gift. Remember, they look for easy targets. It certainly doesn't get easier for a thief than an unlocked car with a running engine.

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5. A good alternative for you is to use your parents' car insurance policy. Your parents are part of a lower risk age group.

There are two conditions that you must fulfill to make this possible: The vehicle must be registered in your parents' name and you must live with them. If you want to be the owner of your vehicle, then be the big boy or girl and also own the higher premiums. Sorry, you cannot have both with this option. However, you can still make a lot of savings by following the link at the end of this piece.

6. You'll save much if you can shop around and do proper comparison. The the difference in quotes returned for a request could be as wide as $1,000 for a particular person. Notwithstanding that this is a good thing, it's crucial that you don't get too excited yet. It's not usually that straightforward if you want the best price/value.

The lowest quote may not represent you the best price/value. Despite the fact that each of the quotes returned will certainly give you the same basic coverage, there may be several differences in the details of each insurer's coverage. This makes it crucial that you find out if there aren't any exclusions that won't serve your best interest.

Don't forget to treat these no-obligation quotes just that way. Don't feel obliged to pay unless you've had all your questions answered satisfactorily. You will saved from rude shocks later if you do this.
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