Car Insurance -- Explaining It

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. In exchange, you agree to pay the premium.

Car insurance provides property, liability and medical coverage. 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 taken care of by the medical coverage.

The validity of most car insurance policies is six months to one year. You must renew the policy once it expires.

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. You could be in serious trouble if you car is involved in an accident without insurance. You may have to comply with the financial responsibility laws including having to pay 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. It is illegal for cars to be operated without insurance.

Finally, a few savings tips...

1. Getting married will bring down your rate by a huge margin. 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. 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, as part of your home shopping activities, check how this neighborhood will affect your auto insurance rate. 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. Never leave your car unlocked and running while you dash in to get something. This is an open invitation to any thief sniffing around. Every thief checks how easy a target is before making a move. An unlocked car with the engine running? What could be easier?

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5. Using your parents' auto insurance policy is a good option for you an under 25. The fact that you are of driving age means that your parents are of a better risk age bracket.

To take advantage of this though, you'll have to live with your parents and also have the vehicle registered in their name. If you want to own your car, then be the big boy or girl and also own the higher premiums. Sorry, you can't 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. While you take other steps to bring down your auto rates, here's what to do to receive lower rates now: Visit reputable quotes sites and request for quotes.

Visit at least five of such sites for the best results. It's free, quick and easy. Make sure you give your correct details as you complete the forms on each site. Thereafter, simply choose the offer that represents the best price/value from the quotes you've obtained.
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