Car Insurance
by Ellise Walsh

Let’s face it. No one likes to deal with car insurance. Buying car insurance is not a task most people look forward to. It is, however, a vital part of owning a vehicle. We may not like to think about it, but accidents do happen, and chances are you will need to use that car insurance some day. Knowing a little bit about the ins and outs of car insurance will help you make the right decision.

One of the first decisions you will have to make is how much coverage you need. Most states have a mandatory minimum amount of coverage that is required by law. Insurance companies are required to provide quotes based on these minimum levels of coverage, as well as providing a quote based on the level of coverage you desire.

Simply put, these mandatory minimums are seldom sufficient to cover you if you are at fault in a serious, or in many cases, even a minor accident. If the mandatory minimum coverage does not fully pay for the property damage and medical bills you caused, the other driver has the right to come after you personally for the rest. In general, the mandatory minimum coverage is only adequate if you have nothing of value to protect. But if you have a home, real estate or other investment assets, you are better off buying additional coverage.

As your circumstances change, you may need to review your car insurance coverage to make sure it is still adequate to your needs. Unfortunately, most people do this only when they are shopping for another insurance policy. Neglecting this important step could leave you seriously underinsured and at risk in the event of a major traffic accident. Try to get in the habit of reviewing your insurance coverage at least once a year. You may want to go through this exercise at tax time each year.

Of course, making sure you can afford the auto insurance is just as important and deciding how much car insurance you need. Car insurance rates vary widely between companies, so it pays to get a number of quotes before making a decision. Talk to your family and friends about their experiences with various insurance companies. Get recommendations from coworkers. The more information you can gather the better positioned you will be to get the best deal.

Of course, you will want to make sure you get quotes on the same level of coverage from all the different companies. That way you will know you are comparing apples to apples and you will be able to make a wise decision. The reputation of the car insurance company is important as well. You will want to know that the company is willing to stand behind you when you need them.

The type of car you drive will make a big difference in your insurance rate, as will your age. You may think it is unfair, but drivers under 25 are routinely charged premiums 30% or more higher than their older counterparts. This is because statistics show that young people are responsible for more accidents than older ones. You may be a perfect driver, but unfortunately you are lumped in with the irresponsible young drivers you’ve seen whizzing by you on the freeway.

That’s not to say that your personal driving history does not play a role in your insurance rate. Indeed, your driving record is one of the most important factors in determining your rate. If you’ve had a speeding ticket or previous accident, you can expect to pay more for your car insurance policy than someone with a clean driving record. Be totally honest with the car insurance agent about any infractions in your past. They will run a copy of your driving record and find out anyway. Its best to be honest up front.

You will need to decide whether to purchase liability only car insurance or full
comprehensive coverage. Comprehensive coverage covers things like storm damage and theft of your car. The decision on whether or not to include comprehensive coverage is up to you and your budget. You can have the car insurance agent give you quotes with and without comprehensive coverage and see how it affects your premium. If your car has a low resale value, you may want to skip the comprehensive coverage.

Buying car insurance may not be fun. But insurance is a necessity, especially in today’s world and on today’s traffic clogged interstates.

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