Car Insurance -- Clarifying It

Car insurance is a contract between you and the insurance company. If your car meets with an accident, you will be eligible for compensation for the losses under the contract. In exchange, you agree to pay the premium.

Car insurance covers property, liability and medical coverage. In case of damage to or theft of your car, property coverage will pay for the losses. The liability coverage will pay for your legal responsibility for bodily injury or property damage caused by your car.

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

Majority of the car insurance policies are valid for six months to a year. You must renew the policy once it expires.

State laws mandate that your 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. Compounding of the car is done is some states. There are heavy fines in some states. 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.

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. Furthermore, as a group, their claims are usually less both in number and average cost per claim.

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2. Your rates will jump through the roof if you modify your car. Doing such reduces your car's safety and, therefore, warrants higher rates as far as the insurer is concerned. Any changes to your vehicle takes your rates up.

3. Before you get carried away with the few hundreds you will save on a house, check if it will not cost you much more in auto insurance. 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?

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?

Remember, you might live in this home for up to 20 years or more. If its location makes you pay up to $200 more in premium, that will add up to $4,000 within that time frame.

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 is an open invitation to any thief sniffing around. Car thieves are known to go 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. If you are of driving age, then your parents certainly are far above twenty five years which means they're better risk drivers.

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 do not like the idea of giving the car's ownership to them and other stuff that may be attached to that, then you will have to forego this option.

6. You can get better rates on auto insurance now by visiting at least five quotes sites. Each quotes site will take you around 5 minutes or less to receive quotes. (Some people give information that are not really true about themselves. That is NOT smart since the quotes you'll get this way will NOT be of any use to you).

You'll have to select lowest auto insurance quote for you from the list of quotes obtained. It's as simple as that. But you could easily save hundreds of dollars.
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