Car Insurance -- Things You Ought To Understand

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.

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

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. Compounding of the car is done is some states. Some states impose heavy fines. If your car is involved in an accident without insurance, the consequences can be serious. 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 are also vital factors 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. 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. There is evidence to show that married people are a lot more stable than their unmarried counterparts. This makes them more careful on the road and, therefore, a better risk to insurers. Furthermore, as a group, their claims are usually less both in number and average cost per claim.

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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. Any changes to your vehicle takes your rates up.

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. 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, 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 simple act makes it very easy for thieves. Every thief checks how easy a target is before making a move. It certainly doesn't get easier for a thief than an unlocked car with a running engine.

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5. Using your parents' car insurance policy is an option for you an under twenty five. If you're of driving age, then your parents certainly are far above 25 years which means they are better risk drivers.

There are two conditions that you must fulfill for this to be possible: The car must be registered in your parents' name and you must live with them. If you want to own your car, then be the big boy or girl and also own the costly premiums. Sorry, you cannot have both with this alternative. However, you can still make a lot of savings by clicking the link at the end of this piece.

6. You can reduce your auto insurance costs by asking for and comparing quotes from at least five reputable quotes sites.
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