Car Insurance -- Explaining Things

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. Paying the premium is your obligation under the contract.

Property, liability and medical coverage are all covered by car insurance. 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 paid by the medical coverage.

Most car insurance policies are valid for six month to a year. The policy must be renewed on expiration.

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. Compounding of the car is done is some states. Heavy fines are imposed in some states. 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.

It is your responsibility to provide insurance for any car you own regardless of who is operating the vehicle. If you operate a car without insurance, you will be in violating the law.

Finally, a few savings tips...

1. Getting married will bring down your rate by a huge margin. 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. "Pimping your ride" does NOT help if you want lower rates. Things like changing your tires to bigger ones than specified by the manufacturer, adding equipment that will increase your car's horse-power will cost you a lot more. So if you're really serious about keeping your rate down, leave your car the way it was manufactured.

3. Do you know that some folks are paying much more in auto insurance because of where their homes are? 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. The truth is that most people don't think about this when they are about buying a home.

Remember, you might live in this home for up to 20 years or more. If its location makes you pay up to $200 more in premium, that will add up to $4,000 within that time frame.

4. Never leave your car unlocked and running while you dash in to get something. This simple act makes it very easy for thieves. Remember, they look for easy targets. And what could be easier than a car that's ready to be driven away -- It takes just seconds.

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5. A good option for you is to use your parents' car insurance policy. If you are of driving age, then your parents certainly are far above 25 years which means they're better 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. This means that they legally own the car. If the benefits of "independence" outweigh your car insurance savings then this is definitely not alternative for you.

6. You can reduce your auto insurance premium by obtaining and evaluating quotes from at least five reputable insurance quotes sites.
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