Car Insurance -- Clarifying Things

When you buy car insurance, you enter into a contract with the insurance company. Under the contract, if your car meets with an accident, the insurance company must pay for the losses. Paying the premium is your obligation under the contract.

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

Most car insurance policies are valid for six month to a year. The policy must be renewed on expiration.

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. Some states impound your car. Some states impose heavy fines. 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 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. 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. 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. Your rates will jump through the roof if you modify your car. 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. 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. Also note that a neighbor not too far away might fall under a lower crime zone than you -- This affects rates.

So check with your agent before you commit to a new home. The truth is that most people don't think about this when they are about buying a home.

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. If you must quickly get something inside, turn your car off, lock up and pocket your keys. Don't leave your car unlocked and running. This simple act makes it very easy for thieves. Remember, they look for easy targets. An unlocked car with the engine running? What could be easier?

Affordable Auto Insurance

5. An alternative for you is to use your parents' auto insurance policy. The fact that you're of driving age means that your parents belong to a better risk age bracket.

There are two conditions that you must fulfill to make this possible: The car must be registered in your parents' name and you must live with them. If you do not like the idea of handing the car's ownership to them and other stuff that may come with it, then you'll have to forego this option.

6. The most vital route to reasonable savings in auto insurance is comparison shopping -- Given that you do it well. You can get quotes that will have a difference in excess of $1,000. You could easily save so much by simply picking the lowest quote. This should apply if you're simply after the lowest price.

Howbeit, if you're looking for the best value to price ratio then you would have to look at the details of the lowest offers. Different insurers may have adjustments for similar policies. It's important that you ask the agent what's part of the deal and what's not.
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