Car insurance, which is sometimes called auto, motor or vehicle insurance, is a form of financial protection against the damage to both property and people that may occur as the result of a car accident. A good insurance policy will be able to help the driver to cope in the event that their car needs to be repaired or replaced after an accident. It will also provide financial assistance if they are injured, or if they have caused an injury to another person.
Be sure to check out the FREE comparison tool at the top of this page! Enter your ZIP code into the box now!
Car insurance is a mandatory form of insurance, although the types and amounts of coverage that are required vary according to where you live. In most cases, it will be necessary to take out a minimum amount of liability or third party insurance. This type of car insurance will cover the cost of injury or property damage that affects other people, and that occurs as the result of an accident for which the policy holder is considered to be at fault.
In addition to this liability insurance, finding and comparing the cheapest car insurance rate quotes can help you get a great policy to cover other costs that may arise as a result of an accident without breaking the bank in monthly premium payments. It is the policy holder who decides what types of coverage they wish to buy, and how much coverage they wish to take out.
Car insurance can cover injuries to the driver and to the passengers they may be carrying in their vehicle.
It can also cover damage to property and to the vehicle itself. Car insurance policies can also provide uninsured or under insured driver coverage.
This type of cover will protect the policy holder in the event that they are involved in an accident with another driver who does not have sufficient insurance coverage to pay for the costs of damage or injuries. It can ensure that the policy holder is protected against accidents that are deemed to be the fault of the other driver, even if the other driver does not have sufficient insurance coverage to pay the required amount.
A car insurance policy will specify exactly what types of damage and injuries are covered, and against what types of event. The policy will also state how much coverage is provided for each type of damage and set deductibles for each type of damage. The deductible is the amount that the policy holder will be expected to contribute towards the costs.
For example, if the deductible is set at 500 dollars, the policy holder will be expected to pay the first 500 dollars, with the insurer paying any additional costs above this amount, up to the maximum. The insurer may set a minimum compulsory deductible, but the policy holder can also choose to increase this to a voluntary deductible. A higher deductible will usually be associated with lower premiums.
The premium charged by the insurer will depend on a number of different factors. The insurer calculates their rates according to how much of a risk they believe they are taking in providing coverage for the policy holder, any other drivers who will be using the car, and the vehicle itself.
If the vehicle is kept in a safer location, for example in a neighborhood with low crime rates, then the insurer may be willing to set a lower premium.
Some insurers may also offer discounts to drivers who keep their car in a secure garage. Cars that have been fitted with alarms or other anti-theft and security devices may also enable the policy holder to obtain discounted insurance rates.
Insurers may also take the usage of the car into account. Discounts are often available for cars that have lower annual mileages. Since they spend less time on the road, they are less likely to be involved in an accident.
The type of vehicle that is being insured will also be taken into account by the insurer when they are determining the rates that should be charged. The age of the car, its value and its power and performance will be considered. Lower rates will be offered to cars that the insurer believes are less likely to be stolen or involved in accidents.
Insurers will also judge how likely the driver or drivers are to make a claim on their car insurance. They will offer discounts to drivers who they believe are likely to be safer behind the wheel. Drivers who are older and more experienced will often be offered lower rates. Insurers may also offer discounts to female drivers or to drivers who have taken advanced driving courses.
Drivers who have previously been involved in a car accident or who have made claims on their car insurance are likely to be penalized with higher premiums. Building up a no-claims bonus can help to significantly lower auto insurance premiums.
Enter your ZIP code into the FREE tool at the bottom of the page!