Auto insurance covers
damages done to you, your car, other people, and other's property as a
result of your car. The amount of insurance you need is dependent on the
other insurance coverage you have, the value of your car, the amount of
other assets you need to protect and the rules in your state. Auto insurance
can be expensive if you have a poor driving record, want it to cover young
drivers, drive extensively in crowded areas or choose low deductibles.
Basic Auto Insurance
coverage. This portion of your policy covers repairs to your
car after an accident, no matter who caused it. If the car is completely
destroyed, this insurance will pay off. If the car was financed, you will
need the proceeds to pay off the loan. Both collusion and comprehensive
insurance is generally written to cover the car's fair market value. If
your car has much value, you should have this type of coverage. If your
car is old and has very little value, you may want to drop this portion
of the coverage.
coverage. This portion of your insurance covers damage to your
car as a result of random acts like fire, theft, floods, hail damage,
vandalism and even damages caused by a stone flying up on the road and
denting a fender. The amount of comprehensive coverage you need is determined
by the value of your car. Many drivers choose to keep comprehensive coverage
on less valuable cars even if they drop their collision coverage because
it tends to be cheaper. But, the insurer will not pay more than the car
liability coverage. This type of coverage is absolutely essential.
If you cause an accident with your car and injure someone or damage their
property, auto liability insurance will the pay the injured person's medical
and repair expenses. This portion of your policy's cost is usually the
Most states require
some level of auto liability coverage. You will probably want more than
the requirement. If there is an accident and you are responsible for damages,
you want to make sure your assets are protected. If you have other assets,
such as a home or investments, you want to make sure you do not lose them
in a lawsuit over an auto accident. The more assets you have, the greater
the coverage you need. Discuss the coverage and costs with an insurance
agent. Also, if a driver that is uninsured or under-insured hurts you,
your policy will pay for your expenses.
Reducing your auto
Your premiums are based on factors such as your age, where you live, type
of car, gender, driving record and how much driving you do. Costs for
auto insurance vary greatly from area to area and company to company.
It makes sense to check out several companies when choosing. Consider
the premium levels and also the service level you can expect from the
company. There are few things worse than not being able to get in touch
with the insurance company after an accident or having to drive 50 miles
to get your damaged car inspected or repaired.
You can also reduce
your premiums by considering the following ideas:
- Drive safely.
Many insurance companies give discounts to drivers with no accidents
or driving tickets. If you have a clean record, make sure the insurance
company knows about it.
- Raise your deductibles.
Low deductibles increase premiums. Making claims for small damages is
also a hassle.
- Do not drive too
much. If you have a short commute to work or take public transportation,
your rates may be less.
- Buy a car that
is cheap to repair. There are probably resources at your public library
or on the Internet that will identify the makes of cars that are expensive
and inexpensive to repair.
- Use the same insurance
company. There may be an overall discount if you have auto and homeowners
insurance from the same company.
- If there is a student
driver, get good grades. Many insurance companies offer discounts if
a student driver gets B's or better in their studies.
- Pay the premium
all at once. Most companies allow policyholders to pay their premiums
annually, semi-annually, quarterly or in some cases monthly. Do the
math and you will find that paying annually will save you money.