Car Insurance -- Explaining Things

By buying a car insurance policy, you are entering into a contact with the insurance company. Under the contract, the insurance company agrees to pay your losses if your car meets with an accident. Your part of the contract is 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 medical coverage will pay for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

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

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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Different states have different penalties for driving a car without insurance. In some states, your car will be impounded. Some states impose heavy fines. If your car is involved in an accident without insurance, the consequences can be serious. 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.

You are responsible for providing insurance for any car you own regardless of 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. Insurers have statistical data that show that people are less reckless and much more careful on the road when they get married. 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.

Discount Auto Insurance

2. "Pimping your ride" does NOT help if you want lower rates. 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, as part of your home shopping activities, check how this neighborhood will affect your auto insurance rate. I know: That isn't usually an issue when you're looking for a home but it's really important.

But think about it: If your new zip code adds up to $300 to your annual auto insurance rate, how much would that amount to at the end of your 30-year mortgage?

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. Every thief checks how easy a target is before making a move. An unlocked car with the engine running? What could be easier?

Cheap Auto Insurance

5. Using your parents' auto insurance policy is an alternative for you an under twenty five. If you're of driving age, then your parents certainly are far above twenty five years which means they are lower risk drivers.

To take advantage of this though, you will have to live with your parents and also have the vehicle registered in their name. 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 huge savings by following the link at the end of this piece.

6. You can get savings of hundreds of dollars on your auto insurance policy by obtaining insurance quotes from insurance quotes sites. The best method is to visit a minimum of five sites and making sure that you provide the same (correct) details.

I advise that you use not less than five quotes sites since it will ensure you do not miss out better quotes not given by the other sites. This gives you a broader basis for doing more thorough comparisons thus increasing your chances of better quotes.
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