How to find Car Insurance

While most people know whether they have liability, collision and/or comprehensive coverage, few people pay much attention to their insurance coverage until after they've been in an accident. In this article, we'll go over car insurance coverage and give you some tips to help you get the most for your money.

Protecting your assets and your health are two of the primary benefits of car insurance. The following are the main types of car insurance coverage:

• Liability Insurance: This coverage pays for third-party personal injury and death-related claims, as well as any damage to another person's property that occurs as a result of your automobile accident. Liability coverage is required in all but a few states.
• Collision Insurance: This coverage pays to repair your car after an accident. It is required if you have a loan against your vehicle because the car isn't really yours in this case—it belongs to the bank, which wants to avoid getting stuck with a wrecked car.
• Comprehensive Insurance: This coverage pays for damage incurred as a result of theft, vandalism, fire, water, etc. If you paid cash for your car or paid off your car loan, you may not need collision or comprehensive coverage, particularly if the blue book value of your car is less than $5,000. 

In addition to the coverage listed above, other optional coverage types include the following:

• Full Tort/Limited Tort: You can reduce your insurance bill by a few dollars if you give up your right to sue in the event of an accident. However, giving up your rights is rarely a smart financial move.
• Medical Payments/Personal Injury Protection: Personal injury protection pays the cost of medical bills for the policyholder and passengers. If you have good health insurance coverage, this may not be necessary. 
• Uninsured/Underinsured Motorist Coverage: This option provides for medical and property damage coverage if you are involved in an accident with an uninsured or underinsured motorist.
• Towing: Towing coverage pays for a tow if your vehicle cannot be driven after an accident. If you are a member of an automobile service, or if your vehicle comes with roadside assistance provided by the manufacturer, this coverage is unnecessary.
• Glass Breakage: Some companies do not cover broken glass under their collision or comprehensive policies. In general, this coverage is not worth the long-term cost.
• Rental: This insurance option covers the cost of a rental car, but rental cars are so inexpensive that it may not be worth paying for this coverage.
• Gap: If you demolish that $35,000 sport utility vehicle 10 minutes after you drive it off the lot, the amount the insurance company pays is likely to leave you with no vehicle and a big bill. The same thing applies if your new set of wheels gets stolen. Gap insurance pays the difference between the blue book value of a vehicle and the amount of money still owed on the car. If you are leasing a vehicle or purchasing a vehicle with a low, or no, down payment, gap insurance is a great idea. 

In addition to the specific coverage options that you select, other factors that affect your auto insurance rates include the following:

• Your deductible: This is the amount of money that you pay out of your own pocket if you get in an accident. The higher your deductible, the lower your insurance bill. In general, a deductible of at least $500 is worth considering, as damage to your vehicle that comes in at less than $500 can often be paid without filing an insurance claim.
• Age: Younger, less experienced drivers have higher insurance rates.
• Gender: Men have higher rates than women.
• Demographics: Though actual risk is determined by the zip code you live in, city residents statistically have more accidents, which drives their premiums higher than those who live in rural areas. Additionally, more people living in an area means more claims, which is reflected in the higher premium prices in such places. If you've recently taken up residence in New Mexico, Alabama, Oklahoma or Florida, expect to pay higher premiums. According to the Insurance Research Council, these states have the greatest concentrations of uninsured motorists, which ultimately seeps into insured drivers' premiums.
• Claims: Accident-prone drivers pay more. If you want to keep your rates low, keep the number of claims that you file to a minimum.
• Moving Violations: Speeding and other moving violations all have a negative impact on your insurance bill. Obey the law to help keep your rates from rising.
• Vehicle Choice: Sports cars cost more to insure than sedans, and expensive cars cost more to insure than cheap ones do. Looking into the cost of insurance before you purchase that new car could help you save a bundle on your car insurance.
• Driving Habits: The number of miles that you drive, whether or not you use your car for work, and the distance between your home and work all play a role in determining your rates.
• Theft Deterrent Systems: If you have an alarm on your car, you'll pay less to insure your vehicle.
• Safety Devices: Airbags and anti-lock brakes both work in your favor by keeping you safer and lowering your insurance bill.
• Accident Prevention Training: Some companies offer discounts if you take a driver's education training course.
• Multiple Policies: If you have more than one car and/or also have homeowner or renter's insurance, keep in mind that many insurance companies offer discounts based on the number of policies that you have with them.
• Payment Plan: Some insurance companies offer discounts based on your payment plan. Paying your entire yearly bill at one time, instead of in installments, may lead to a discount.
• Credit Score: Good credit lowers your car insurance rates. Bad credit increases them. 
• Not having auto insurance: If you ditched your auto insurance in an effort to save some money, you've committed a classic case of being "penny smart and pound foolish." Not having any auto insurance, even for just over 30 days, will cause your premiums to jump.

1. Compare Rates for Various Cars

If you are shopping for a new car, call your current insurance (or a new insurance company) to compare premiums for the cars. Car insurance costs vary because of the safety record, repair costs and likelihood of theft as well as the price of the car.

2. Avoid Gaps in Coverage

If you are switching policies, make sure you are completely covered at all times. If you let your insurance coverage lapse by forgetting to make the premium payments, your rates are likely to be increased.

3.Claim all Your Discounts

If your car has extra anti-theft or safety features such as anti-lock brakes, most insurance companies will give you a discount on your premiums. You may also be eligible for a discount if you have taken a defensive driving class or, if you are a student, you have good grades

Before you buy a policy, research your policy provider—regardless of who it is. Numerous firms rate the financial health of insurance companies, and your state also has an insurance website that rates firms based on the number of complaints they have received. (For a comprehensive list of state insurance regulators, visit the Federal Citizen Information Center.)

Be a smart buyer: do your homework and check out what a company's policy does and does not cover before purchasing it. Make sure the policy you pick covers the vehicle at all times. Many small insurance companies offer low rates compared to the big ones because of their lower overhead costs. But, when there is an accident, and an insurance claim is filed, these small companies can sometimes be a pain. They may try to wash their hands and say, "it's not covered under your policy." That's not what you want to hear when you really need them after paying your premiums for months. Also, don't go with a local insurance company that doesn't cover out-of-state accidents.

When considering any company, big or small, whose costs are lower, also consider their customer service. Further, it's a good idea to investigate the company's financial strength (which directly impacts their ability to pay your claims) through a rating service such as A.M. Best.

Also keep in mind that a company offering a discount on the first month or two of premiums will probably make up for that discount with higher rates in the following months. Overall, you want to find the middle ground between price and quality.

Don't Overdo It

When you talk to any insurance agent or service provider, they are going to try to sell you more coverage so they can make more money. In general, you don't need a high amount of coverage unless you own an expensive vehicle, drive extensively or don't have adequate health insurance. Many insurance companies are able to make easy money off of uneducated buyers who don't know what they want. By using the tips from this article, you won't have to let a smooth-talking agent steal money from your pocket.

Having ample and reliable insurance coverage is a very important component of auto ownership: you don't want to experience money problems when you are already going through the trauma of an accident. Be a smart buyer, do the proper research, compare quotes and create a package that suits both your coverage needs and your budget.

The following car insurance providers offer great resources for senior drivers such as driver improvement courses and provide discounts on car insurance for seniors: 

• AARP (formerly known as the American Association of Retired Persons)
• The American Automobile Association (AAA)
• Geico (in select states)
• Allstate

Shopping for car insurance wisely can help you protect your health, your assets, and your wallet, so make the effort to determine the type and amount of coverage that you need. Also, make sure that you review and understand your policy before you sign on the dotted line. If you plan well, you'll be pleased with the results, should you ever find the need to put your policy to the test by making a claim.