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Tips on Buying Car Insurance

Auto insurers underwrite policies to evaluate the risk given to each insurance applicant. During this process, a person is grouped into a category, such as a high-risk driver, low risk, teenage or elderly. If this risk associated with the applicant is considered too high, the application could be denied coverage altogether. After the results are calculated, the insurance carrier then gives a price, which is based on the perceived risk that driver poses.

1. This is also known as rating the driver

Insurers use this rating as a way to measure what it costs to insure a particular person if a claim is made and how likely claims would occur again in the future. This is often referred to as financial responsibility that an insurer takes on. The tip is to maintain a safe driving record and avoid traffic accidents and you will go a long ways towards getting cheaper car insurance.

2. Not all Insurance Companies Rate Drivers the Same

Many providers use the same general metrics but their algorithms that ultimately determine rates are quite distinct. One of the biggest factors that all insurers use in calculating premiums is the frequency of accidents. When a person files a claim, the insurance kicks in and accidents can cost many thousands of dollars, especially if there is a death involved. The more claims a person files, the riskier he or she is in the eyes of the carrier and more likely to file a future claim. Thus, higher rates are imposed on this at-risk motorist. To keep rates low, avoid incidents and filing claims and you will save a lot of money on auto insurance. If you have had accidents in the past don't worry.

3. Main Contributing Factors that Affect Auto Insurance Rates

*Driving Record: Auto Insurers will take a close look at how many citations and accidents you have been involved in.

Keep up a good driving record and watch your rates go down.

*The Location you live: If you live in the city, you can expect to pay more than if you live in a rural location with much less traffic.

* The Car you Drive: This is a very large factor that makes up rates. New and expensive luxury or sports cars have some of the highest insurance rates. On the other hand, used cars that are safe and cheap to repair have some of the lowest coverage costs. Get a boring used car and save on coverage.

* Marriage Status: Married people pay less for car ins because they are considered more responsible.

* Your Age: Drivers that are under 25 can expect to pay about double for auto ins. The sweet sport for the lowest rates is between 32 and 62 years of age.

4. Apply for all the Discounts you can

A great and smart way to save on vehicle insurance is to apply for several discounts. If you have more than one automobile, consider getting a bundled or multi-vehicle discount. You can also take a safe driver course and save about 5%. Other popular discounts are good student, military, and even teacher.

5. Shop Direct on the Web for the Cheapest Rates

The internet has literally taken over the world. It has also saved millions of people money on car insurance. Buying car insurance online is smart because you can find direct rate pricing that most brokers can't match.

Cheap Comprehensive Car Insurance

Once of the important choices, you need to make when researching the right policy, is whether or not to add comprehensive insurance. This extended coverage is also referred to as "full cover insurance" and provides a greater level of vehicle protection. Let's take a close up look at the definition first. Comprehensive insurance is coverage for damage that's been inflicted to your vehicle that's not connected to an automobile collision.

The things covered can be quite broad but also very rare in some instances. Here is a short list of the most common comprehensive claim occurrences.

* Vehicle Theft

One of the main reasons people buy this type of insurance is protecting the value of their car, in the event it is stolen. Automobile thefts are escalating and not just for expensive luxury cars. Take a look at the top 10 most stolen vehicle list, and you will see Honda Accords, Civics, and even the Toyota Camry. If you park your car on the street in an urban area, you should strongly consider adding full cover auto insurance on your policy.

* Glass Breakage

Have you ever cruised behind a dump or garbage truck only to have something come flying at your windshield at 60+ MPH? Probably so and for many people, it happens every year or two. This is yet another reason why comprehensive ins might make sense to you. Under this plan, if your windshield is busted, you can get it replaced. You will have to pay a deductible, though.

* Animal Damage

Believe it or not, thousands of automobiles get hit by animals each year, hard enough to cause vehicular damage. Even large dogs can strike a car and cause dents, not to mention a 600-pound deer. If you live in an area that has lots of wild animals, consider getting comprehensive protection.

* Weather Events

There are numerous weather related things that could inflict damage to your car. A flood might completely ruin your car's electronic system, or a tornado might pick it up in the air and completely total it. Even a mild windstorm can cause heavy branches to fall and hit your vehicle, causing severe damage.

* Vandalism

Some people do nasty things, and this includes vandalizing other people's private property. This can be tire damage, "keying" or even smashing your vehicle due to rage. This is why it's always important to not only get enhanced insurance if you can afford it but always garage your car in a secured area.

Mandatory Comprehensive Auto Insurance

There are some situations where you may be required to get comprehensive ins. The main one is if you're leasing or financing a car. Lenders need to protect the value of the loan amount they've invested, and they do this by making this enhanced coverage mandatory. Also, even if you pay for your car in full, if it is worth more than $25,000 you should probably get full cover ins.

Another fact worth noting is many insurers will not let you buy comprehensive insurance unless you first add collision onto your policy. These 2 types of coverage go together and provide excellent protection for almost anything that can happen on and off the road.

How to get Cheap Comprehensive Car Insurance

Although this type of insurance is more expensive than "bare-bone" liability plans, there are a few helpful tips that can bring your

costs down quite a bit. The first thing you should do is get a higher deductible. Many people think it should be low, like $250 or $500. Raise it to $1,000, and you can save about 10% or even more. Another tip is to bundle all your cars together and save another 5% to 10%.

Cheap Student Auto Insurance

There are numerous reasons why younger people pay more for automobile insurance. This includes the obvious, like lack of driving experience and high crash statistics. The good news is it's possible to get cheap student car insurance by taking advantage of every discount that is available. Almost every auto insurer offers discounts, even to teens. You can also get estimates in only a few seconds by entering some quick information about your age, car and zip code. Here are a few of the most common discounts young drivers can take advantage of.

1. Good Student Discounts

Young people in high school or college can qualify for a car insurance discount just for being a student, but there is a catch. The student needs to have and maintain good grades. Students can save some serious cash by working hard in class and getting good grades. Auto Insurers have amassed massive amounts of accident data and statistics show that drivers who excel academically are also much safer drivers. Car insurance companies price premiums based on the perceived risk and thus give discounts to less risky drivers, like those with great grades. Getting good grades takes sustained discipline and control, qualities that just so happen to make great drivers.

Good Student Discount Qualifications

* Most insurance carriers offer these discounted rates to active students who maintain a B or higher GPA over the course of a school year. The good student discount is usually 10% off the auto insurance premium. Hard work does pay off in the classroom and also saves you some serious money so study hard!

* You must be a full-time student. Part-time college students may not qualify for this type of discount.

* There's a student age limit of 25 years old.

If you are a parent paying for your kid's automobile insurance, use this discount as a motivating factor. If your child misses this good student discount this year, help them get their grades up and qualify for it following year. One idea is to offer to help pay for a new car with the insurance savings they will realize by getting excellent grades.

2. Certified Driver Safety Classes

Another smart way to get cheaper student car insurance and learn a lot is to complete a certified driver's education class. These classes are usually taught by highway patrol officers and other highly experienced drivers, who have a wealth of driving knowledge to share. Not only will you learn how to drive better, but after you successfully pass the class, you can save up to 10% on your coverage. A good tip is to make sure the class you intend to take is certified, so the insurance carriers will recognize it and give you this important discount.

3. Buy a car that is cheaper to insure

The vehicle you are insuring is one of the biggest factors that will impact car ins rates. When you're a young student driver, you are already facing rates that are on average double that of most older drivers over 25. The automobile you drive can either help you get lower rates or cause your premiums to rise quite a bit. Stay away from exotic sports cars like a Porsche, pricey new cars and those vehicles that are always on the top of the most stolen list. Think about getting a used car like a Toyota Camry that is fun to drive, safe and cheaper to insure for students.

4. Get Discounts for Resident Students

Students who will be going to a college or university in another city or state (often more than 100 miles) can qualify for a resident student discount. This little known discount applies to those students who plan on not driving while enrolled in school and only on limited occasions, such as winter and summer breaks. A student who wants to get these special low rates must provide proof, such as an admission letter, with the college's address. Also, the car insurer will require valid proof of mileage and might also impose other restrictions on the driver.

5. Find the Cheapest Student Auto Insurance Online

Thanks to the web, finding the cheapest rates on student car insurance is easier than ever before. Also, you can compare several rates in just a few short minutes and find the policy that is best for you.

Purchasing a 6 or 12 Month Car Insurance Policy

It seems like an easy decision to make but for some reason you are completely unsure. You are left asking what are the benefits and drawbacks of each policy length? Insurance agents frequently get asked what's the best option and the truth is it depends on several factors. There are advantages and disadvantages to each policy time frame. Let's look further into this and analyze both options, so you can make a more informed decision and save some money too.

The Advantages of buying a 12 Month Car Policy

* Your Premium Rates are set

It may seem obvious, but you might have overlooked this simple point. Prices on almost everything from new cars and houses to shoes seem like they are constantly going up. This is also true for auto insurance pricing. With more people getting into distracted driving accidents and increased insurance fraud, many insurers have had no choice but to raise premium rates annually. The good news is you can lock in a set rate for an entire year by buying a 12 month policy. If on the other hand you buy a 6 month policy, there is a very real possibility when it's time to renew it, you may see a rate hike for the same coverage. Another big plus for getting a longer term policy is you don't have to worry about it for an entire year, which eliminates a little bit of stress and makes budgeting your bills easier.

* You can save by paying for 12 Months of Coverage in Advance

Almost every insurance provider offers discounts for customer that pre-pay for an entire year of coverage. The reason why insurers give price breaks by paying upfront is because they can invest that money and start growing it immediately. Insurers make a large portion of their profits from investing the premium revenue they receive into investments like stocks and bonds. If they can get the entire policy amount paid upfront, then they can put that money to work and profit from it.

* Having only 1 Yearly Bill is more Convenient

It seems life is getting more complicated by the minute. Anything that eliminates added stress is a big plus. This includes reducing the amount and frequency of bills like car insurance. Having a 12 month policy that is pre-paid will make your life a little bit easier. You won't have to worry about choosing another insurance plan or paying that bill again for an entire year.

* You can Stop extra fees many insurers add on to short-term policies

Many people just can't afford to pay their entire car insurance cost upfront and need to break it down into monthly payments. Most insurers have options like auto-pay that will charge someone's credit card on a specific date or even draft the payment out of the bank account. The drawback is, there are often fees attached to making monthly premium payments that can really add up. Try to buy an entire year of coverage up front and not only will you get a discount, but avoid the fees too.

Advantages of Purchasing a 6 month Car Insurance Policy

* You can get a lower Rate Later on

It is true that auto insurance costs are going up consistently but it's still possible to find a great deal and lower your insurance cost. If you don't like being locked into a long-term yearly commitment, then a 6 month policy might be right for you. With direct rates online, you have an excellent chance of getting cheaper coverage when your short term 6 month policy expires.

* It's Less of a Financial Commitment

If you are on a tight budget but have enough money to buy a 6 month policy in full, then this shorter term might be better for you. You might still get a small discount for paying in full and will not have to come up with additional money that a 12 month policy costs.

* Tickets might be Removed from Your Driving record in less than 6 months

Do you have a serious driving infraction on your DMV record that will be removed soon? If so, you might want to get a shorter 6 month policy. This makes sense because once the infraction is removed from your record, you can apply for coverage and most likely get a cheaper price. If you have cleaned up your driving record in a 6 month period then apply for coverage again and you should be able to really lower your rates quite a bit.

Conclusion

If you're a good, responsible driver and have some money saved up, it makes sense to buy 12 months of coverage in advance. However, if circumstances such as driving infractions that will expire in 6 months or less allow you to get lower rates later on, you should not lock yourself into a long 12 month policy. Get a shorter 6 month policy and then apply again for lower rates if this circumstance applies to you. Whatever policy length you choose, always try and pre-pay in full so you can take advantage of discounts.

Vacation Tips - Does Your Insurance Go With You?

Ahhh - vacation! You're thinking about all the activities you'll be doing and all the new places you'll be seeing. You should also be thinking about any insurance consideration you might have before taking the trip so if the unexpected happens, you'll be prepared with how to deal with it. Here are a few insurance tips to remember to help you have a pleasant time on your vacation:

- What if I get injured and I am out of the country? Most Health Insurance plans only cover medical emergencies that are life-threatening. You may need to pay up front for medical assistance outside of the US then submit bills for reimbursement. If you catch the flu or get food poisoning for example- don't expect to be covered by your health plan.

- Should I purchase "Travel Insurance?" This is something to consider if you are traveling to an area where you might have concerns about medical care. For example, these plans can pay to have you airlifted to a location where the type of medical assistance you need is available. When I traveled to China, I didn't realize that only .3% (according to Wikipedia) of the population has the same blood type I do. If I had been in an accident, it might have been quite difficult to find any blood supply should I have needed it.

- What if I injure someone accidentally? A great example is when you are trying to retrieve that heavy suitcase you placed in the overhead bin on the airplane and it lands on someone because you couldn't control it? If you have a homeowner policy, your personal liability coverage would cover any accidental injury to others.

- Do I need to purchase insurance coverage for a rental car? If you have an automobile policy, you are probably covered for any bodily injury or physical damage done to others. The physical damage you might cause to the rental car may or may not be automatically covered by your auto policy. You should ask your agent before renting the vehicle to know if you need to purchase the rental insurance. Be aware- you are also liable for the loss of income to the rental agency if the car you rent is in an accident and they are unable to rent it for 2 weeks for example while it is being repaired. Many auto contracts do not include this coverage.

- Does my auto insurance cover my "road trip" in other states/ countries? Most auto policies will cover you for the minimum required limits for the state you happen to visit even if your coverage is less than that state minimum. Coverage minimum requirements vary by state. Be aware that auto policies do have territory limitations. You will usually have coverage in the US, it's possessions and Costa Rica as well as Canada but not anywhere else.

- Do I need to purchase insurance for a rented Motorhome or Boat? Yes - in most instances, you will need to purchase the insurance for liability and physical damage where you rent.

Now that you have everything "covered," go and have a great trip. Oh - and don't forget to pack!

Auto Insurance Guide Just for Beginners

Auto Insurance Guide Just for Beginners

From financial perspectives, auto insurance is both investment and waste of money.

As an investment, the coverage protects vehicles and physical health in the event of accidents. Insurance company compensates for property damages and physical injuries.

For safe driver or low-risk, this is a waste of money since the possibility of road accident is slim. With defensive driving techniques, auto coverage is almost useless.

Accidents do happen; even an expert driver can get into road accident due to bad weather, malfunction vehicle, sudden flat tire, and a lot of possible incidental reasons. Regardless of the circumstance, an accident almost always leads to collision. When that happens, other drivers sustain injuries and their vehicles need repair or replacement. In the attempt to avoid big expenses to compensate other drivers, auto insurance helps give the payout and keep everybody's finances healthy.

Whether a collision is at policyholder's fault or not, auto insurance company has the obligation to help its customers to settle financial disputes. The amount of financial assistance available, however, depends on the insurance policy. What makes things complicated is the fact that there is no one-policy-fits-all package. Everyone has different needs and personal preferences, so insurance providers must accommodate the needs with different sets of coverage and limits. There are plenty of coverage options and overwhelmed first-time buyers tend to make the wrong choices without guidance. Chances are they pay either too much or too little; both of which are wrong. Some factors that affect the types and amount of coverage include:

· Personal Liability: it is one of the most important types and mandatory in most states. In the event of an accident where the policyholder is at fault, this coverage provides compensation for other drivers' and their passengers' medical bills. Besides the protection from medical cost, Personal Liability also includes Property Damage coverage to compensate vehicle damage. The combination of those expenses can be too expensive to cover out of policyholder's own pocket, so the coverage minimizes the risk of financial burden.

· Major Accidents: there can be thousands of vehicles on the road every day. With more of them, the risk of collision increases. In major accident situation which renders the policyholder's vehicle damaged beyond repair, auto insurance Collision Coverage helps pay for the replacement. If damages are results of natural disasters such as fire and flood, Comprehensive Coverage kicks-in to provide assistance. Both collision and comprehensive are optional.

· Uninsured Driver: what if the at-fault party is uninsured? According to a 2014 study by Insurance Research Council, about 1 out of 8 drivers in the United States have no insurance. In ideal situation where all drivers have valid auto coverage, the cost for vehicle repair and medical bills are the burden of the at-fault party. Insurance providers offer Uninsured/Underinsured Coverage to prepare for such circumstance.

· Faulty Vehicle: regardless of how someone maintains a vehicle, there is a chance of engine breakdown, flat tire, or empty fuel tank in the middle of a trip. Roadside Assistance coverage helps to take care of the vehicle in this emergency situation. It is an optional purchase from insurance provider, but it can save you from hassles and difficulties. For those who drive dozens of miles on day to day basis may find the coverage as good preventive safety measure. Typical vehicle owners clubs tend to offer membership benefit that include roadside assistance as well. Members must pay annual fee to maintain the benefit, yet the service available from insurance company tends to be less expensive.

· Car Type: brand new vehicle that is still under manufacturer's warranty has little chance of damage. On the other hand, old vehicle which has travelled thousands of miles or years of everyday usage is more prone to damages. Vehicles come in many different varieties such as SUVs, sport, luxury, off-road, and standard personal/family model without any excessive additional features. Performance cars come with higher premium rate due to higher possibility of speeding which can lead to accidents. Luxury vehicles with expensive replacement part also demand for higher premium. Some models have higher risk of theft as well, so the premium will adjust for the perils.

· Experience: insurance companies divide customers into two major categories: low-risk and high-risk. Teen drivers fall into the latter due to the lack of experience behind the wheel. Stand-alone teenage driver auto insurance can be expensive, but parents can include their children as secondary drivers to bundle the policy and get discounts. High-risk category also includes drivers with previous involvements in major accidents, recurrent traffic violations, and seniors.

Deductible and Premium

Premium is the payment policyholders have to make every month (or any agreed period). There are many ways to reduce premium such as deductibles and discounts. Deductible is a term to describe the amount of money that policyholders pay out of their own pockets to cover compensation. For example, an accident causes another car to sustain damage worth of $600. When policyholder pays $200 deductible, the insurance company only needs to pay $400. Many insurers offer discounts for safety devices, good students with good grades, multi-car policy, completion in Defensive-Driving course, and on time payment.