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If you are considering buying a car or have decided to get a better deal on auto and car insurance, then this article will help you get the upper hand on insurance companies. We are going to look at what auto insurance really consists off and how you can save money on your premiums.
I know most people look at auto insurance as a necessary but annoying expense. It's hard to accept paying thousands of dollars to get your car insured, particularly in the current economic climate. A better way to think about auto insurance, and much easier on your mind, is to see it as an investment for the future. If you are looking for full coverage, liability only or a combination, the goal is the same: To get maximum value for your money. The best way to find cheap auto insurance is to shop around online, but you have to know what to look for. That is what we are going to look at in this article. Many times you will find that once you understand the basics of online auto insurance, that you can save money while even improving your coverage.
So what kind of auto insurance should you get for your car? That depends on several things. Basically there are two general types of auto insurance: Liability Only Insurance and Full Coverage Insurance. Between the two there are many different combinations and you can often tailor your insurance package to suit your needs, but you must understand the difference to take advantage of the offers.
Let us look at the first type of car insurance:
Liability Only Car Insurance
Car insurance is regulated at the state level, which means that each state has different laws and guidelines concerning what kind of insurance you need to be road legal. All states however have the same minimum requirement: You need to have Third Party Liability Insurance. Where they are different is in how much liability coverage you need. Liability insurance is the part of your insurance that covers damage or injury that you may end up causing to other people or their belongings. Most often this will be damage to another persons car. You must have insurance by law that covers his or hers cost. You can not drive any kind of vehicle on the roads without liability insurance.
There are different rules regarding how much liability coverage you need. One state may require you have 25,000 dollars as a minimum while another will only require 15,000 dollars. To find out how much you need, contact your local traffic authority or ask your insurance broker.
One thing you should keep in mind anyway, is that these auto insurance legal minimums or just that: Legal Minimums. Accidents are expensive and can easily run into more than the minimum required. It doesn't do much good to have liability insurance for 25,000$ if you commit damage for 100,000$ Then you would still owe 75,000$, which isn't something most of us have lying around. Of course you will have to compromise as a higher coverage limit means a higher premium as well.
Full Coverage Car Insurance
This is a full-coverage comprehensive insurance policy that is the total opposite of the bare-bones liability insurance. A comprehensive auto insurance policy includes three areas: Third Party Liability Insurance, Collision Insurance and Comprehensive Insurance.
Third Party Liability is the same as we have already discussed. Limits can be negotiated in both directions.
Collision Coverage is an add-on that you can get to protect your car against collisions. You will probably be required to get this type of insurance if you are financing your car trough a credit agency or bank car.
Comprehensive Insurance is also know as Other Than Collision Insurance (OTC). It will cover you against any damage done to your car that isn't caused by a collision. The most common examples would be fire, theft, vandalism and weather damage. Even if the name implies it doesn't cover collisions, you will be covered for collisions with non-vehicles, such as if an animal runs on to the road and you hit it.
How To Save On Premiums
There seems to be a lot of confusion about how auto insurance premiums are calculated. Some people and demographics seem to be stuck with ridiculously high premiums. Insurance companies use formulas to calculate the average risk for a person that fits your profile. Factors included is your gender, age and marital status. Experienced drivers pay less, new drivers more. Men pay more than women and singles more than marrieds. Fair or not, this usually means that young men pay very high premiums if they are even able to get insurance.
If you are in one of these categories what can you do to lessen the impact of your auto insurance premium? You can make sure to drive safely for the first years so you may qualify for less of a premium. Likewise, some cars have lower risks than others, so look into safety records. Lastly there is always the possibility of letting someone older or more experienced to sign the insurance if you can convince them.
I know most people look at auto insurance as a necessary but annoying expense. It's hard to accept paying thousands of dollars to get your car insured, particularly in the current economic climate. A better way to think about auto insurance, and much easier on your mind, is to see it as an investment for the future. If you are looking for full coverage, liability only or a combination, the goal is the same: To get maximum value for your money. The best way to find cheap auto insurance is to shop around online, but you have to know what to look for. That is what we are going to look at in this article. Many times you will find that once you understand the basics of online auto insurance, that you can save money while even improving your coverage.
So what kind of auto insurance should you get for your car? That depends on several things. Basically there are two general types of auto insurance: Liability Only Insurance and Full Coverage Insurance. Between the two there are many different combinations and you can often tailor your insurance package to suit your needs, but you must understand the difference to take advantage of the offers.
Let us look at the first type of car insurance:
Liability Only Car Insurance
Car insurance is regulated at the state level, which means that each state has different laws and guidelines concerning what kind of insurance you need to be road legal. All states however have the same minimum requirement: You need to have Third Party Liability Insurance. Where they are different is in how much liability coverage you need. Liability insurance is the part of your insurance that covers damage or injury that you may end up causing to other people or their belongings. Most often this will be damage to another persons car. You must have insurance by law that covers his or hers cost. You can not drive any kind of vehicle on the roads without liability insurance.
There are different rules regarding how much liability coverage you need. One state may require you have 25,000 dollars as a minimum while another will only require 15,000 dollars. To find out how much you need, contact your local traffic authority or ask your insurance broker.
One thing you should keep in mind anyway, is that these auto insurance legal minimums or just that: Legal Minimums. Accidents are expensive and can easily run into more than the minimum required. It doesn't do much good to have liability insurance for 25,000$ if you commit damage for 100,000$ Then you would still owe 75,000$, which isn't something most of us have lying around. Of course you will have to compromise as a higher coverage limit means a higher premium as well.
Full Coverage Car Insurance
This is a full-coverage comprehensive insurance policy that is the total opposite of the bare-bones liability insurance. A comprehensive auto insurance policy includes three areas: Third Party Liability Insurance, Collision Insurance and Comprehensive Insurance.
Third Party Liability is the same as we have already discussed. Limits can be negotiated in both directions.
Collision Coverage is an add-on that you can get to protect your car against collisions. You will probably be required to get this type of insurance if you are financing your car trough a credit agency or bank car.
Comprehensive Insurance is also know as Other Than Collision Insurance (OTC). It will cover you against any damage done to your car that isn't caused by a collision. The most common examples would be fire, theft, vandalism and weather damage. Even if the name implies it doesn't cover collisions, you will be covered for collisions with non-vehicles, such as if an animal runs on to the road and you hit it.
How To Save On Premiums
There seems to be a lot of confusion about how auto insurance premiums are calculated. Some people and demographics seem to be stuck with ridiculously high premiums. Insurance companies use formulas to calculate the average risk for a person that fits your profile. Factors included is your gender, age and marital status. Experienced drivers pay less, new drivers more. Men pay more than women and singles more than marrieds. Fair or not, this usually means that young men pay very high premiums if they are even able to get insurance.
If you are in one of these categories what can you do to lessen the impact of your auto insurance premium? You can make sure to drive safely for the first years so you may qualify for less of a premium. Likewise, some cars have lower risks than others, so look into safety records. Lastly there is always the possibility of letting someone older or more experienced to sign the insurance if you can convince them.
