photo credit: Michael (mx5tx)

It is always exciting to buy a car. Even if you are purchasing a used car, it is new to you. It is easy to get caught up in all the excitement. A lot of people are shocked when they find out that they can’t even drive their new car until they have the minimum required insurance per their state’s laws. To make matters worse, many people are clueless when it comes to shopping for insurance. They are unsure of what types of coverage they have and have no idea of what to expect from their insurance company.

Select the Appropriate Insurance Coverage

Start with the state required minimum coverage. Remember that this is the absolute least amount of coverage that you are allowed, by law to have. This is not necessarily the coverage that you really should have. Many times the minimum coverage is not near enough to pay for the costs involved in an auto accident. This leaves the at-fault driver paying a lot of money out of their own pocket. You should have sufficient Bodily Injury coverage to pay for at least one serious injury. You should also make sure that your Property Damage coverage is enough so that it will replace an average new car if it was to be totaled. There may be other costs, but these are good steps to take to minimize your personal costs.

Other Coverage

You should also remember some of the other available coverage types that can be required by law some times, but are usually left up to an individual’s discretion. Among these insurance types are Collision – this is to cover any type of damage that happens as a result of a collision, and Comprehensive coverage – this does not cover collisions but it does protect against fire, vandalism, theft or other damages incurred from a non-impact accident. It is common for these two types of insurance to be bundled together, they are also offered separately.

Be Aware of Your Driving Record

Be sure to review your driving record before you purchase any insurance policies. Your potential insurance carrier is going to be checking your driving record, so it is a good idea for you to know what they will be seeing. Be aware if you have had points on your record that you may have gotten within the past year all the way up to the past 3 years. If you have had any suspensions, you will need to tell your insurance agent about them. Insurance drivers assess individual drivers for any potential risks. This means that your driving history is an important part of their assessment.

Compare Insurance Quotes from Multiple Companies

Get multiple quotes before you make any purchases. It always pays to shop around for the best deal. If you were buying a new television, chances are you would look for the best deal. Do the same thing for your car insurance purchase. One insurance company may offer more perks and benefits than another. You could get incentives like free roadside assistance or windshield replacement.

Be Sure to Understand the Policy

Always make sure that you understand what you are signing. If there are any facts about the policy that you don’t understand, have your agent explain it to you. Once you sign on the dotted line, you are locked in to a binding contract. Make sure that what you are signing up for is what you expect.

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Liability insurance, which is required in the majority of states, consists of Bodily Injury and Property Damage insurance options which are combined. Liability means that you bear the blame for a particular damage that occurs to another person. Some examples of this would be if you were to cause an accident or collision.

What is Bodily Injury Liability Coverage?

If you were to strike a pedestrian or injure a person in another car that is struck by your vehicle, Bodily Injury Insurance would be the coverage type involved. It is wise to go above minimum requirements. The cost associated with paying medical bills has risen much quicker than the price of car insurance, thus having minimum coverage could leave you personally responsible for paying large sums of money from your own personal funds.

What is Property Damage Liability Coverage?

Property Damage Insurance is very similar to Bodily Injury Insurance. Property Damage Insurance repairs or replaces the other person’s property that you have damaged in the course of an accident. As surprising as this may sound, the minimum Property Damage Liability coverage required by the majority of states is not enough to pay for the replacement of a new automobile, if you are unfortunate enough to be responsible for totaling a someone’s new car. A good rule to remember is to be sure that your Property Liability coverage is, at minimum equal to the average price of a new vehicle.

Do I Still Need Personal Injury Protection?

Personal Injury Protection, also known as PIP insurance, provides coverage for your injuries in an accident for which you are at fault. This is not a standard portion of regular liability insurance. In most cases it must be purchased as a rider or add-on to your automobile insurance policy. If you do not have PIP insurance coverage, you may end up injured, out of work and facing mounting medical bills. It really pays off to have PIP coverage, as it may prevent a relatively minor accident from causing complete financial ruin for your family.

What About Uninsured Motorist Coverage?

If a person who does not have sufficient, or any, Liability coverage, then Uninsured/Under-insured Motorist coverage would pay for injuries or damages suffered by you or your passengers and any damage to your property. This coverage is not a standard part of the average liability policy, but some laws require it. Even if your state does not require this type of insurance it is a good idea for anyone that drives an automobile to have it.

photo credit: Made Underground

There are many instances where a domestic partnership is eligible for the same price breaks on insurance as a traditionally married couple. There is a possibility of claiming one of the vehicles a a personal or pleasure craft, the qualification for multiple policy discounts and also to capitalize on various opportunities to save money

What is a Domestic Partnership?

A domestic partnership is very similar to a marriage. Usually, domestic partners have lived in the same residence in a long-term relationship with each other. Often times these partnerships are referred to as civil unions. Some insurance company may require that the domestic partnership be legally registered in order to receive coverage. Other companies use varied methods to make a determination on the status of the relationship.

Multi-Car / Multi-Driver Discounts

Domestic partners may qualify for multi-car/multi-driver policies. Both vehicles will need to be at the same residence in order to qualify for these discounts. Both vehicles are considered to be standard commuter automobiles with the exception being if they are used for a special purpose during the standard occupation.

Personal and Pleasure Car Insurance

If a car is used for trips to the store, socializing or other transportation activities not related to work, this vehicle can qualify as a personal vehicle. However, if a vehicle is used for specific activities like camping or towing a boat, this car can be classified as a pleasure vehicle. Insurance coverage for pleasure vehicles is the least costly of all, but the vehicle must meet several criteria, which are used to make this determination. One example of the criteria used is number of miles that the vehicle is driven in the year

Multiple Policy Discounts

Most insurance providers can offer multiple policy discounts; these are typically rewarded to customers because of their loyalty over the years. Having home insurance and car insurance policies with the same insurance company is a standard way that many people qualify for multiple policy discounts.

Other Ways to Save on Car Insurance

Perhaps the single best way to save money is by being a safe driver, though this is not the only way. There is the possibility of professional discounts for one or both partners. Police, nurses, and many other emergency workers are eligible for discounts as well. Drivers that register for and complete driver improvement courses can be eligible for discounts too. Speak with an insurance agent to discover which types of discounts you may be eligible for.

photo credit: visual.dichotomy

Every driver must be insured. Younger people, specifically students are typically classified by insurance companies as being higher risk, so the majority of car insurance companies charge them much higher rates. Many students find it less expensive to remain on their parents’ insurance plan. However, if a student attends a school that is out of town, this is no longer an option. Students can benefit from obeying traffic laws, being careful about their credit score, and minimizing unimportant driving. By taking these steps, students can obtain more affordable insurance and save money in other ways.

There are several factors that can affect the insurance rates for young drivers including:

• Age
• Grades
• Credit score
• Amount of driving

Insurance and Youth Risks

Anyone 25 or younger is considered to be an insurance risk by insurance carriers. Research has proven that this age bracket is more prone to driving accidents and to breaking minor traffic laws like speeding and not stopping at stop signs. Because of these factors, it is more expensive to insure younger people. Their insurance rates will usually not get lower until these statistics lessen.

Discounts Available for Good Grades

Getting good grades in school demonstrates that you are a trustworthy student. Maintaining a 3.0 or higher grade point average can help qualify you for discounts on your car insurance coverage. Provide your insurance provider with your most recent grades and be sure to submit new grades as you receive them.

The Importance of Building Good Credit

Everyone, students included, can learn to better manage their credit scores. Your first credit transactions mark the beginning of your credit scores. These initial credit purchases can be credit card purchase or perhaps buying an automobile. Keeping a good credit score is very important, as banks and insurance companies will check your scores to determine whether or not to give you loans or to provide low cost insurance to you. Maintaining a high credit score will assist you when it comes time to buy insurance. Beside that, a good credit score is important to your future.

Reduce Your Driving Mileage to Lower Rates

Some regions make pay per mile insurance available to drivers that do not often drive far. If pay per mile is not available where you live, be sure to give an account of your mileage to your insurance company and inquire if they have any low mileage discounts available.

photo credit: Yogendra174

It would be an understatement to say that car insurance can be confusing. We all know that certain types of coverage are required by law. There are quite a few types of coverage available including bodily injury liability, property damage liability, personal injury protection or PIP, collision, comprehensive and uninsured/underinsured coverage. Before you close the deal on your next car purchase, be sure that you have a proper understanding of the basics of insurance coverage, so you are equipped with the knowledge to ask the important questions and make informed decisions.

Bodily Injury Liability

In many states having Bodily Injury coverage is mandatory. The amount of coverage needed may be higher than the bare minimum that these states require. For example, if you were to be at fault in an accident where 4 people were injured, one of the people injured quite seriously, then a $20,000 Bodily Injury coverage would be drained in no time; leaving you the responsibility for paying any additional medical costs yourself.

Property Damage Liability

This concept applies to Property Damage Liability just as it does to Bodily Injury. It is mandatory in many states, but the minimum requirement is very often not sufficient to pay the price for a replacement of just one new car. In cases where there has been extreme property damage, the costs can quickly exceed $50,000. It is important to have sufficient coverage that is comparable to the average costs of damages.

Personal Injury Protection

Personal Injury Protection or PIP insurance for short, provides coverage for injuries that you and passengers in your car sustain in an accident for which you are at fault. Few states require this coverage, even though personal injury is one of the most costly expenses related to automobile accidents.

Collision

This type of coverage pays for repairs to your vehicle that are sustained when you strike another car, mailbox, or anything else. Collision Insurance does not provide coverage for injuries, though it does pay for damages to your car in a way that is similar to how Property Liability Insurance covers damages that you have caused to another person’s car. Often times Collision and Comprehensive coverages are rolled into one policy, though not always.

Comprehensive

The intent of Comprehensive insurance is to cover the cost of repairs or replacements that are not in direct relation to collision damage. For instance, fire, vandalism, broken windows, or other damages. It may not be required in many states, but it can prove to be a financial safety net.

Uninsured / Underinsured Motorist Coverage

This coverage protects you, your passengers and your car if you should have the misfortune of being hit by an uninsured driver or by a driver that has insufficient insurance coverage to pay the costs for damage incurred. If the insurance company for the person who causes the accident pays all that they are obligated to, this insurance type will cover the remainder of the payments.