Auto Insurance – What You Need to Know

What You Need to Know

When comparing auto insurance quotes, you need to have a good understanding of how and why an agent came up with those rates. Educating yourself on the ins and outs of car insurance allows you to see where you can save money and helps you make the right choice for your insurance.
What Affects Auto Insurance Rates?

The cost of insurance for your auto is determined by several different factors starting with, of course, your car. An expensive luxury car costs more to repair or replace, making your insurance premium higher. Cars with a greater probability of being stolen also raise insurance premiums, while cars with better safety or reliability records can lower your insurance rate.

Location is another factor that affects insurance rates. A garage in a low crime neighborhood is more likely to keep your car safe than a parking spot on the street of a high crime area. You can expect a break in your insurance premium if you own that garage in a safe area.

You also play a part in your own car insurance rates. Many insurance companies offer a good driver discount if you have a clean driving record. And that good old credit score also comes into play. Keep your credit score up and your insurance rates will stay down.

The remaining factor in your insurance premium is simply your coverage: higher deductibles and lower liability limits will lower your insurance premium. However, when considering deductibles and limits, it is important to remember that savings on your monthly insurance premium can raise your out-of-pocket expenses if you have to file a claim.
How Will You Be Covered?

So what does car insurance actually cover? The most obvious coverage is collision insurance. If you collide with another vehicle and that collision causes damage to your auto (and it’s your fault), this insurance covers that damage after the deductible is paid.

Liability coverage is the insurance that covers damage done to someone else or to someone else’s car if the accident is your fault. Be aware that limits do come into play with liability coverage: lower limits may lower your insurance rate, but could significantly raise your out-of-pocket expense.

Comprehensive insurance coverage is for those times when damage is done to your auto by something other than an accident, such as vandalism. Also, most car insurance also includes coverage for uninsured drivers that hit you and don’t have insurance to cover the costs of the accident.

When comparing car insurance quotes, be sure you go over each kind of coverage thoroughly and have a good understanding of how you and your car are being protected.