Car Insurance -- Things You Should Know

By buying a car insurance policy, you are entering into a contact with the insurance company. If your car meets with an accident, you will be eligible for compensation for the losses under the contract. Your part of the contract is to pay the premium.

Car insurance provides property, liability and medical coverage. Damages or theft to your car are paid by property coverage. The liability coverage will pay for your legal responsibility for bodily injury or property damage caused by your car.

The medical coverage will pay for the cost of treating injuries, rehabilitation and sometimes lost wages and funeral expenses.

Majority of the car insurance policies are valid for six months to a year. The policy must be renewed on expiration.

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 is different in different states. Some states impound your car. 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.

It is your responsibility to provide insurance for any car you own regardless of who is operating the vehicle. Your car will be operating illegally if it does not have insurance.

Finally, a few savings tips...

1. Getting married will bring down your rate by a huge margin. It's commonsense that every person becomes more stable and less reckless once they get married. This stability affects such a person for good when he/she is behind wheels. 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. 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.

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. Also note that a neighbor not too far away might fall under a lower crime zone than you -- This affects rates.

Therefore, take your time to ask your agent what effect your new zip code would have on your rates before you make that down payment. The truth is that most people don't think about this when they are about buying a home.

But think about it: If your new zip code adds up to $300 to your annual auto insurance rate, how much would that amount to at the end of your 30-year mortgage?

4. A lot of folks have lost their cars in the short seconds that they took to dash inside to get something while leaving their cars running and unlocked. Don't make this mistake. 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 cheaper auto insurance premiums if you use your parents' policy. If you are of driving age, then your parents certainly are far above 25 years which means they are lower risk drivers.

To take advantage of this though, you'll have to live with your parents and also have the vehicle registered in their name. This means that by law they own the car. If the benefits of "independence" outweigh your car insurance savings then this is certainly not an option for you.

6. You will save a lot of dollars by visiting not less than 5 quotes sites. If you do this, you will be able to get the lowest auto insurance quotes possible as five sites will return up to 25 quotes altogether.
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