Car Insurance Policies

If you own a car, you need to have car insurance. Having car insurance will provide financial assistance as well as security in the event you are involved in an accident or an accident-related legal case. It is in fact legally mandatory to have minimum amount of car insurance in the United States in all states except Wisconsin and New Hampshire, where it's not necessary to get insurance so long you can prove you have sufficient funds to cover claims in case of accident; if you can't prove you have to cash to cover possible costs, you have to buy auto insurance. When buying, bear in mind that minimum car insurance may not be enough to cover your medical or legal expenses; so it is advisable to get more than the minimum required insurance.

1. Don't buy the first insurance policy you come across. Research online and compare different policies and rates being offered by different companies. Consider long-term car insurance benefits.

2. If shopping online isn't for you, contact a local insurance agent and have him explain different insurance policies to you.

3. If you don't want to get your insurance through an agent, there are companies that sell directly to clients.

4. Be sure to choose an insurance company that has a good public profile, a financially sound reputation and a good customer service record.

5. Ask your friends and family to recommend a reliable insurance company that they use. Or you can check with listings in state insurance bureaus and consumer reference guides.

6. Inquire about getting discounts. Many insurance companies offer discounts if you are insuring for multiple cars or multiple drivers or if you already have other insurance policies (life insurance, home insurance, etc) with that same company.

7. Consider if you can afford taking a higher deductible. Here the insurance kicks in only after a certain amount of loss has been crossed. If you suffer losses below the limit, you don't get any insurance. If you take a higher deductible, you generally have to pay low premiums. But be sure you can afford to pay for the deductible in event of accident.

8. Determine appropriate coverage. Check what your car's book value is. If it is less than what the insurance is costing you, you can get low car insurance or just go for the minimum required amount of car insurance.

The cost of car insurance policies varies from company to company and depends upon several factors like -

• The company or agent that is offering the insurance
• The type of insurance coverage you want to purchase
• Whether you are taking a higher deductible
• The area where you are located. People in rural areas generally have to pay less in premiums as compared to people living in urban areas., given that accidents, vandalism and theft are more common occurrences in the latter areas.
• The kind of vehicle you are insuring. If it's a Ferrari, for example, expect to a great deal.
• Your age. Many companies have different policies if you are a teenager or if you are a senior citizen.
• Your driving experience

Your chance of getting substantial discounts and more affordable car insurance is higher if -

• You have a clean driving record
• You are a non-smoker
• You commute to work on public transportation

Different types of auto insurance:

Here are the different types of policies you can buy -

1. Bodily Injury Liability - covers medical bills and lost wages arising from an accident for which you are accountable.

2. Medical Payment - will pay the medical bills for you, your passengers or injured pedestrians in case of accident, whether you caused the accident with your driving or it was someone else at fault.

3. Personal Injury Protection (PIP) - covers medical and non-medical costs resulting from accident, like salary loss, child care, funeral costs, etc.

4. Property Damage Liability - pays for repair or replacement of things other than the car that were destroyed or damaged in the accident.

5. Collision Coverage - will pay to repair your vehicle if you cause an accident.

6. Comprehensive Coverage - will pay for non-accidental damages, like if your car is stolen or vandalized or gets totaled by a falling tree or some other natural disaster.

7. Uninsured and Underinsured motorist coverage - will pay if someone else causes the accident and they don't have auto insurance or haven't kept their premiums updated.

You can also get extra insurance coverage for rental reimbursement, coverage for towing and labor charges and gap coverage.

Keep your insurance papers in your car at all times, so that if you are involved in an accident or if you are asked for proof of insurance, you have it. Failure to produce proof of insurance can result in a fine. If you don't have insurance, your diver's license can be revoked and, in a worst case scenario, you can even end up in jail.