Auto Insurance Explained
Auto insurance can be a little bit confusing. There are lots of different types of coverage available, some are required by law, others aren't legally required but still very important and some will be completely optional. It is important to make sure that you have the right coverage and that you aren't paying too much for it. A few basic tips should help to keep you on the right track.
The most important type of auto insurance that you will have is liability coverage. This is the one that you are legally required to have. This is to protect other people in the event that you cause an accident. The state will set a minimum amount of coverage that you will need to have. In most cases you will want more than the legal minimum coverage. In addition there are a number of other types of auto insurance that you will need to have. You will definitely want uninsured driver and personal injury coverage to protect you in the event that you are injured and the other guy has no insurance or the accident was your fault. You will also likely want comprehensive coverage to protect you if your car is stolen or damaged.
The way that auto insurance premiums are determined is a bit of a mystery to most people. The natural assumption is that they are determined largely by your driving record. In reality this isn't the case, your driving record is only a minor factor. Far more important is where you live. In general the more populous the state you live in the higher your premium. The logic being that the more people there are the more crowded the roads will be and the more likely an accident will be. Other important factors are your age, your gender, women pay far less, they type of car you drive and your credit history. A lot of these factors are beyond your control so the cost of insurance really doesn't vary much between people of the same age and gender living in the same area.
There are however some things that you can do to bring your insurance costs down. A good driving record and credit history will help. Choosing a safe car will also help. One of the best options is to limit the amount that you drive. The less time you spend on the road the less likely an accident is. If you limit your mileage each year you can reduce your premiums. You can also save money by not driving at night since accidents are far more likely to occur then. Another good option to save on insurance is to raise your deductible. Insurance is supposed to pay for major damage, not minor fender benders. If you raise your deductible and just pay for the small stuff out of your own pocket you will almost certainly save money in the long run.