Car Insurance -- Clarifying Things

Car insurance is a contract between you and 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 covers 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 cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses are taken care of by the medical coverage.

Most car insurance policies are valid for six month to a 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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Different states have different penalties for driving a car without insurance. In some states, your car will be impounded. 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.

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

As the owner of a car, you are responsible for providing insurance for the car, no matter who is operating the car. It is illegal for cars to be operated without insurance.

Finally, a few savings tips...

1. Marriage is something that will do your auto insurance rates a world of good. This is true even though you can't just go off to marry just because of this. Insurers have statistical data that show that people are less reckless and much more careful on the road when they get married. They generally file fewer claims and when they do, they usually cost less.

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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.

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. 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?

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. This doesn't come readily to mind when you're shopping for a new home. Does it?

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. A lot of folks have lost their cars in the short seconds that they took to dash inside to get something while leaving their cars running and unlocked. Don't make this mistake. The only easier thing for a thief would be if you handed over your keys as a gift. 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. As an under 25, you can pay cheaper car insurance premiums if you use your parents' policy. If you are of driving age, then your parents certainly are far above twenty five years which means they are lower risk drivers.

You must remember that the vehicle must be registered in their name and you must be living with them if you want to use this option. If you want to own your vehicle, then be the big boy or girl and also own the higher rates. Sorry, you cannot have both with this alternative. However, you can still make a lot of savings by following the link at the end of this piece.

6. You can see savings of hundreds of dollars on your auto insurance policy by requesting for insurance quotes from insurance quotes sites. The best way is to visit at least five sites and making sure that you input the same (correct) information about yourself.

I advise that you use a minimum of five quotes sites as it will ensure you do not miss out offers not carried by the other sites. This gives you a broader basis for doing more extensive comparisons thus increasing your chances of better quotes.
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