Car Insurance Basics
Car insurance may be a bit confusing if you don't know the basic aspects of this type of service. But it's not that complex and is fairly easy to understand and shop around when you learn its essential terms. To make things clearer to you, here are some of the basics you should know about car insurance:
Car insurance is mandatory
You don't have the choice of driving with or without car insurance. Each state has specific requirements concerning car insurance coverage that every driver should meet in order to drive a car legally. Being caught while not having enough coverage or any at all will lead to a fine, license suspension and even jail time depending on the state.
Car insurance includes different types of coverage
Car insurance policies are in fact bundles of different insurance coverage types that can be included, excluded or modified according to your needs. The only mandatory part of any policy is the third party liability coverage that pays for the damages and injuries you deliver to third parties during an accident. All other coverage types such as collision, comprehensive, rental car insurance, uninsured motorist and others are optional and can be adjusted according to your personal preferences.
Car insurance rates vary from company to company
It's nearly impossible to find to identical car insurance quotes from two different companies. When shopping around you will notice that quotes differ from one provider to another even if you provide the same set of data when quoting. This is because each company has different methods of calculating their quotes. You can use it to your advantage when shopping around for car insurance.
Car insurance rates depend on many variables
Car insurance companies use a set of factors to determine the rates you will be charged with. Each company uses a different weight of each factor during calculations, however the overall set is pretty much the same among all insurers. The following factors will influence your car insurance rates: your age, sex, marital status, driving record, place of residence, credit rating, car make and model, its power, top speed, safety features, theft rates and repair costs to name a few.