How Car Insurance Works

Automobile Insurance is required by law to protect you from total financial ruin. Your health, the other driver’s health, in the case of an accident, and your legal liability are what it’s all about. For the insurance companies, it’s all about the numbers and the risk factor. If you are young, old, or have a record of unsafe driving, you are a higher risk than their ideal client. After that, it’s all about how much you are willing to pay to cover you and/or your family’s possible risk factor.

Here are a few things you should look at to get the best car insurance for your money:

• State Law: Make Sure you check out your state’s minimum requirements. These should be easily available online or with a quick phone call to your local DMV. The minimum required by law is usually not enough to fully protect you in case of an ‘at fault’ accident. Did you know that all your financial assets can be sought after in a law suit if the medical, legal costs, etc. exceed that of your policy? This is why it pays to insure you and yours for at least a little more than the legal minimum in your state.
• Deductible: Your deductible is your negotiating factor. How much can you lower your monthly or total policy rate with a higher deductible? Remember, you have to pay this amount in full and out of pocket when/if you have a claim, so there is some risk involved. Lower deductibles mean higher rates and vice versa.
• Risk Factor: How safe do you drive? How safe is everyone on your policy? Often younger drivers are more expensive, simple because of statistics. It might pay off to put new drivers or those with a record of moving violations on a separate policy if you have multiple vehicles. With multiple vehicles, your rates can go up on every vehicle for a young or ‘risky’ driver.
• Discounts: You can get discounts for several different things, so be sure to ask. Discounts are offered for - no claims, safe driving, multiple vehicles, good grades, young drivers who take a safe driving course, full pay up front, electronic pay, and many other things. Again, don’t forget to ask.
• Insurance Companies: This is a big investment so you’ll want the best your hard-earned money can buy. Check out the competition. Check all the companies you are looking at. You want a fast response to your claims. You want the best coverage you can get for what you can pay. You want a company that is financially secure. Check out their ratings online and pay attention to the customer service comments. Shop around and find a company that fits your needs today.

In short, you want to make sure you and your assets are protected in case of a lawsuit resulting from a claim. You want to know you’ve got a company you can count on to respond in a timely manner to meet your needs in case of an accident. And you want the lowest deductible you can safely afford when combined with your overall policy cost. Make sure you take the time, which will be quick online, to check out several insurance companies to find the policy that best fits your driving and financial needs.