| Understanding The Factors For Pricing Your Auto Insurance Policy |
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| Written by Anna Abola |
| Monday, 27 September 2010 15:10 |
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Do you drive? Do you own or lease your own car? If you do, you need to buy auto insurance before you take your pretty new (or used) set of wheels out on the road.
Do you drive? Do you own or lease your own car? If you do, you need to buy auto insurance before you take your pretty new (or used) set of wheels out on the road. Scads of insurance for sale, but which policy is best? The first thing you need to do is to figure out the kind of auto insurance you're going to need. If you've got a new car or you are leasing your car, you're probably going to need coalition and/or comprehensive car insurance. Collision insurance will pay for damage to your vehicle if you're in an accident with another car or an object. Comprehensive insurance pays for damage to your vehicle that didn't happen because of an accident. For example, if your car is in a severe rainstorm with hail and it's damaged as a result, the auto insurance you buy will pay for the repair, less any deductibles you opt for. If your car is older, simple liability insurance will probably do, and it's going to save you a significant amount of money on premiums. Liability insurance won't cover any damage to your car, but it will cover you for property damage or bodily injury to the other party if you're involved in an accident and are the one at fault. How can you save money on your car insurance? Auto insurance rates can fluctuate significantly from company to company, but there are several factors that don't have anything to do with driving, necessarily. Where you live is going to determine how much you pay for your car insurance, because if you live in the city, you'll pay more than you do if you live in a rural area. Why? Because accidents and vandalism are much more common in urban areas than they are in rural areas. Your age, too, impact how much you pay for car insurance; if you're a younger driver, you'll pay more than an older driver, and if you are a male, you'll pay more than a female, even someone your own age. That's because male drivers have more accidents than female drivers do. As you get older, gender differences ease, so that by the time you're over 25, you should be paying less you are a male -- as long as you keep yourself accident free. There are also things you can directly control when you're trying to manage auto insurance costs. Let's take a look at a few of them. Pick a "safe" car Auto insurance companies give breaks to people who drive "safe" cars. auto insurance companies know which cars are most risky, either because they are targets for theft or because of safety issues. Do some research and find out which cars auto insurance companies deem "safe," and "low risk," and then choose among those. Drive "safe" -- follow the rules of the road No matter your age, if you're a good driver you'll pay less for insurance than you will if you think driving is a good opportunity to play "chicken" with the guy in the next lane. In other words, follow the speed limit, pay attention to traffic laws, and follow the rules of the road. Avoid traffic tickets and accidents, and you're going to pay a lot less for your insurance than you will if you don't. Go easy on the driving It's not always possible to avoid driving, but the less you drive, the less you're likely to pay for insurance. Carpool when you can, use public transportation to get to work, bike or walk short distances, et cetera. Check out discounts Most insurance companies offer some kind of discount to customers, whether they be "good driver" discounts, "good student" discounts, or discounts for having multiple policies with the same company. If you don't see any discount information advertised, make sure to ask. Do your homework Finally, do your research. The Internet has made it very easy to compare quotes among a variety of companies. A few clicks of the mouse could save a significant amount of money. Compare policies side-by-side before you buy, but do choose the appropriate policy with the lowest cost. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. |