Wednesday, October 28, 2009
Car Insurance -- Clarifying It
When you buy car insurance, you enter into a contract 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. 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 medical coverage will pay for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.
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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The penalty for driving a car without insurance varies from state to state. Compounding of the car is done is some states. Heavy fines are imposed in some states. You could be in serious trouble if you car is involved in an accident without 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.
You are responsible for providing insurance for any car you own regardless of who is operating the car. If you operate a car without insurance, you will be in violating the law.
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. If you want to keep your rates down, do NOT "pimp your ride." 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. 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. This is an open invitation to any thief sniffing around. Remember, they look 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 a good option for you an under twenty five. The fact that you are of driving age means that your parents belong to a lower 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. This means that by law they own the vehicle. If the benefits of "independence" outweigh your auto insurance savings then this is certainly not an option for you.
6. You will save much by visiting at least 5 quotes sites. That way, you'll make it most likely that you'll get all the lowest auto insurance quotes possible because five sites will present up to 25 quotes altogether.
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