Auto Insurance: An Informative Guide

Auto insurance is available for all types of vehicles including cars, trucks, and motorbikes. This type of insurance is purchased as a form of monetary protection against vehicular damage or bodily injury in the event of an accident. Most insurance companies offer three types of coverage—liability coverage, propety coverage, and medical coverage. Liability coverage comes to the rescue in case of legal issues involving bodily injury or property damage. Property coverage offers protection in the event of any damage to the vehicle and also in instances of theft

Medical coverage addresses expenses incurred in treatment of injuries, loss of income, or funeral expenses as the case may be. Each state has its own requirements related to auto insurance. The quotes given by insurance companies will vary and comparing rates can help find the lowest premiums. Most of the quotes will include collision and comprehensive coverage and by increasing the deductibles on these, lower premiums can be obtained. Some discounts may also be available based on varying criteria.

Quoting Premiums

Auto insurance premiums are influenced by factors such as the driver’s age, gender, marital status, type of car owned, color of the car, driving record, and credit score. Of these, age, gender, and marital status are unchangeable. The rest can be modified to obtain a lower premium. For instance, insurance premiums are the highest for those under the age of 25 as statistics indicate that individuals in this age group are more likely to get into accidents. Drivers aged between 50 and 65 have been found to be the most careful drivers. Studies also indicate that women are more cautious drivers than men and are likely to get a better rate on auto insurance. Married couples with excellent driving records will also benefit in a similar manner.

An inexpensive car will be cheaper to insure as well as one with good safety features. It is popularly believed that the color of the car is crucial in determining insurance premiums. Red cars are believed to attract higher insurance premiums than those of any other color since the color is associated with a ‘need for speed’. But there are no statistics available to support these facts. The driver’s place of residence will also influence the rate. A person living in a crowded city or one with a high crime rate will attract a higher premium.

Factors Determining Rates

Poor judgment and unsafe driving habits can cause insurers to perceive that individual as high risk and quote an exorbitant premium or even refuse coverage. Any kind of traffic violation—be it a parking ticket, a speeding ticket or a DUI charge—can give the wrong message. Some states require insurers to hike premium rates for some specific offenses or in the case of habitual offenders. Serious violations can lead to premiums being increased for a period of three years. An accident can cause the premium to go up by 20 to 40 percent. Not admitting guilt and refraining from paying the fine when issued a traffic ticket will leave the driver with the opportunity to contest the charge in the future. In the same way, an excellent driving record can save an individual hundreds of dollars annually in premiums, as can turning 25.

Lowering Insurance Premiums

There are numerous discounts offered to drivers based on their driving record, the number of miles driven, the age of the driver, insuring more than one vehicle, getting home and auto insurance from the same company, and the safety features available in the vehicle being insured. Buying directly from the insurer instead of an agent can save quite a few dollars annually. Shopping around can help pinpoint a company that offers lower premiums. Such insurers may be able to keep premiums low by offering customers the options to ask for higher deductibles on collision and comprehensive coverage.

Statistics

Of the many auto insurance providers in the United States, some stand out due to excellence in customer service and value for money policies that they offer. Amica Mutual gets a 5-star rating in overall satisfaction, pricing, and customer service as rated by J D Power. Ameriprise, Eeire Insurance, Shelter Insurance, Automobile Club of Southern California (ACSC), Auto-Owners Insurance, and Geico are rated high in terms of pricing and overall satisfaction. But Geico Auto Insurance customers have said that the company does not keep its word as far as discounts offered are concerned. They claim that though attractive rates are offered and quoted initially, the final premium is much higher than initially claimed. Commerce, 21st Century, Automobile Club Group (ACG), Farmers, Mercury, The Hanover, and GMAC rank the lowest in terms of rates as well as service.

What is Auto Insurance?

Automobile Insurance

Car Insurance

Buying Auto Insurance

How Accidents Affect Rates

Uninsured Motorists

Filing a Claim

Factors Affecting Insurance

How Much Insurance Do You Need?

Reducing Premiums

Personal Auto Insurance

This article is a resource created by Cheap Car Insurance meant to educate and raise awareness regarding auto insurance. Sharing is permissible. Please contact us if you have any questions. Get a car insurance quote in your area.