Car Insurance — Things You Need To Understand
October 20, 2009 by Chimezirim Gabriel Odimba
Filed under Auto Insurance
Car insurance is a contract between you and the insurance company. Under the contract, if your car meets with an accident, the insurance company must pay for the losses. Your part of the contract is to pay the premium.
Property, liability and medical coverage are all covered by car insurance. In case of damage to or theft of your car, property coverage will pay for the losses. 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.
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.
Different states have different penalties for driving a car without insurance. Compounding of the car is done is some states. Some states impose heavy fines. You could be in serious trouble if you car is involved in an accident without 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.
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.
It is your responsibility to provide insurance for any car you own regardless of who is operating the vehicle. It is illegal for cars to be operated without 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. 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. They generally file fewer claims and when they do, they usually cost less.
2. If you want to keep your rates down, do NOT “pimp your ride.” 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. Any changes to your vehicle takes your rates up.
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. I know: That isn’t usually an issue when you’re looking for a home but it’s really important.
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. 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. Car thieves are known to go for easy targets. It certainly doesn’t get easier for a thief than an unlocked car with a running engine.
5. Using your parents’ auto insurance policy is a good option for you an under 25. 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 will have to live with your parents and also have the vehicle registered in their name. If you want to be the owner of your car, then be the big boy or girl and also own the higher premiums. Sorry, you can’t have both with this alternative. However, you can still make a lot of savings by clicking the link at the end of this piece.
Learn more at Discount Auto Insurance and Cheap California Auto Insurance. Chimezirim Odimba helps people save on insurance.
