Car Insurance -- Explaining It

Car insurance is a contract between you and the insurance company. If your car meets with an accident, you will be eligible for compensation for the losses under the contract. In exchange, you agree to pay the premium.

Property, liability and medical coverage are all covered by car insurance. Damages or theft to your car are paid by property coverage. If you car causes bodily injury or property damage, the liability coverage pays for your legal responsibility.

The cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses are paid by the medical coverage.

Majority of the car insurance policies are valid for six months 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 varies from state to state. 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 be financially responsible for paying 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.

As the owner of a car, you are responsible for providing insurance for the car, no matter who is operating the car. 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. 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. 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. Do you know that some folks are paying much more in auto insurance because of where their homes are? 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 check with your agent before you commit to a new home. 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. 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?

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5. As an under twenty five, you can pay lower car insurance rates if you use your parents' policy. The fact that you're of driving age means that your parents belong to a lower risk age bracket.

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 want to be the owner of your vehicle, then be the big boy or girl and also own the costly premiums. Sorry, you can't have both with this alternative. However, you can still make huge savings by following the link at the end of this piece.

6. You will save much money in auto insurance if you obtain and compare auto insurance quotes from quotes sites. You will realize savings if you go to only one quotes site. But keep this in mind, you will get better results by visiting at least five.

The straightforward logic in this is that you'll receive a greater number of auto insurance quotes from a wider range of insurance companies. This increases your chances of receiving better quotes.