The Nuts and Bolts on Finding You the Best and Most Affordable Car Insurance
Fortunately for American drivers, carrying car insurance is the law in all 50 states. The rates, however, vary from state to state and are based on the safe driving history of the people in any given state. That is, a state that has a history of a lot of accidents will also have higher rates on their car insurance. How cheap rates are is determined to some extent by your own address.
Car insurance has several variables. They are the minimum coverage requirement for your state, your chosen deductible, added features, your age and your own driving history. If you have had several accidents or traffic violations, you will have a higher price. Thus, one of the first steps you can take to control your cost is to be a safe driver. Learn to drive defensively, avoid moving violations, wear a seat belt, and keep your car in good repair to avoid things like brake failure and other mishaps that could result in an accident.
The part of your insurance that you cannot control is the minimum liability coverage requirement. Liability refers to coverage for an accident that is your fault, and it pays for the damage you caused to another person or vehicle. This is represented by a series of numbers such as 25/100/25. The first number is the amount the insurance company will pay for each insured person. The second is the maximum the company will pay per accident, and the third is the maximum property damage per accident. In this example, the company would pay $25,000 for each person up to a maximum of $100,000 and would by $25,000 for the damaged vehicle. Some states have a very low minimum requirement–too little to allow you to purchase a replacement vehicle. In those cases, you can opt to increase the coverage. Also, some states require you to carry uninsured motorist coverage in the event of an accident with someone who is not insured.
Most of the optional variables cover your own vehicle. Collision coverage, the most expensive variable, pays for damage to your own car, after a deductible, if the accident is your fault. You can lower your premium by choosing a higher deductible. Most companies quote a price based on a $250 or $500 deductible, but you can take a deductible as high as $1000. The cost of collision coverage is based on the value of your car.
Unless you have a loan on the car, you can choose not to take collision coverage. However, since we can't control the forces of nature, it's normally best to include "Comprehensive cover" with "full glass." Comprehensive coverage pays for repairs to your vehicle when the damage is cause by forces beyond your control such as animals running into the road, storm damage and theft. Comprehensive coverage is inexpensive, and using it generally does not hurt your driving record. Full glass replaces your windows. If a passing vehicle kicks a stone into one of your windows and breaks it, your glass is replaced without a deductible applying.
One more very inexpensive option is towing and rental. If your car breaks down, you can be refunded for the cost of towing and for the rental of a replacement while yours is being repaired. Usually you have to pay up front, however, and submit your receipt for reimbursement.
Like your driving history, your age contributes to your cost. While you can't control your age, you can usually get a more affordable premium if you take drivers' education or defensive driving courses. You can also buy with an "insurance mind." That is, find out what the insurance rates are on that snazzy sports car. You may find that something a bit less racy looking will take a smaller chunk out of your bank account, both in cost of the car and in the insurance for years to come.