Car Insurance -- Things You Should Know

When you buy car insurance, you enter into a contract with the insurance company. Under the contract, if your car meets with an accident, the insurance company must pay for the losses. In exchange, you agree to pay the premium.

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 taken care of by the medical coverage.

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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Different states have different penalties for driving a car without insurance. Compounding of the car is done is some states. There are heavy fines in some states. Serious trouble. That's what's in store for you if your car is involved in an accident with insurance. You may have to comply with the financial responsibility laws including having to pay 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. Your car will be operating illegally if it does not have insurance.

Finally, a few savings tips...

1. Marriage is something that will do your auto insurance rates a world of good. This is true even though you can't just go off to marry just because of this. 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. Doing such reduces your car's safety and, therefore, warrants higher rates as far as the insurer is concerned. Any changes to your vehicle takes your rates up.

3. It's easy to save a few hundred dollars on a home but lose thousands over the years on auto insurance because of its location. Also note that a neighbor not too far away might fall under a lower crime zone than you -- This affects rates.

So check with your agent before you commit to a new home. I know: That isn't usually an issue when you're looking for a home but it's really important.

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. Remember, they look for easy targets. It certainly doesn't get easier for a thief than an unlocked car with a running engine.

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5. As an under 25, you can pay lower car insurance rates if you use your parents' policy. Your parents certainly belong to a lower risk age bracket.

To take advantage of this though, you'll have to live with your parents and also have the vehicle registered in their name. If you do not like the idea of giving 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 save a lot of money in auto insurance if you get and compare auto insurance quotes from quotes sites. You'll make savings if you go to just one of such sites. But keep this in mind, you'll get more by using at least five.

The simple logic in this is that you will obtain a greater number of auto insurance quotes from many more insurers. This increases your chances of receiving better rates.
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