Car Insurance -- Clarifying Things

When you buy car insurance, you enter into a contract with the insurance company. If your car meets with an accident, you will be eligible for compensation for the losses under the contract. Your part of the contract is to pay the premium.

Car insurance covers property, liability and medical coverage. Damages or theft to your car are paid by property coverage. 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 paid by the medical coverage.

Most car insurance policies are valid for six month to a 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 is different in different states. Some states impound your car. Heavy fines are imposed 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 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. 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. 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.

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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. 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. Homes in the same neighborhood may fall under different risk zones as far as your insurer is concerned.

So, as part of your home shopping activities, check how this neighborhood will affect your auto insurance rate. 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. 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. The only easier thing for a thief would be if you handed over your keys as a gift. 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. An option 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 group.

You have to bear in mind, though, 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 do not like the idea of handing the car's ownership to them and other stuff that may be attached to that, then you will have to forget this option.

6. You can bring down your auto insurance premium by asking for and evaluating quotes from at least five reputable quotes sites.
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