Auto Insurance Explained in Simple Terms

Auto insurance, is insurance that you purchase for your cars, trucks, motorcycles and boats etc. It provides you with protection from losses that may incur as a result of a car accident. While this may sound simple enough to understand there are many types of auto insurance policies available to you and it can be rather confusing. Your coverage level and types will vary depending on the policy that you choose.

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    by Matthew Keith

    We all hate doing it, but it's something that we all must do at one time or another... the wonderful task of shopping for car insurance quotes!

    Since there's no avoiding it, you might as well learn a few ways you can save money in the process. Here is a compilation of the top tips you can use to make sure you never overpay for your car insurance premiums...

    1. Search for quotes regularly - Many people inadvertantly pay the same premium for years without ever shopping around. As your vehicle ages, it depreciates in value. You shouldn't pay the same premium on an older vehicle as you would on a newer one... think about it! It's generally good practice to do a quote search on a yearly basis, but the more often you do it, the better chances you have of getting lower rates.

    2. If you have an older vehicle, consider "liability only" insurance - When making a decision like this, you need to consider the value of your vehicle compared to what you're paying for your premium. If your vehicles wholesale value is, say $1000, why pay almost that much per year (give or take) when that is all you will get from your insurance agency... if you total your vehicle?

    3. Take a defensive driving course - A simple 6 hour defensive driving course can save you up to 10% on your insurance premium. Contact your local department of motor vehicles for information on taking this course. Many times, you can also take this course by mail, by video, or even online!

    4. If you have more than one vehicle in your household, insure them with the same agency - Most insurance agencies will knock a huge percentage off of your premium for multiple auto insurance policies.

    5. If you also have life, home, fire, boat or any other type of insurance, use the same agency - As with having multiple auto policies, most agencies will knock a huge percentage off of your premium for multiple policies.

    6. Increase your deductible - The higher the deductible you choose, the lower your premium will be, so set your deductible at the highest rate possible... just make sure that if you were to need the insurance you would be able to cover this deductible.

    7. Maintain good credit - Insurance agencies, just like any other business, like to be paid... and on time. A good credit rating will lower your premium.

    8. Think like an insurance agent - Insurance agencies base their rates foremost on one thing... risk. The more at risk you seem to be, the higher the premium will be, and vice versa. When talking with an agent, give them reasons that you are at a lower risk, ie: you have a safe vehicle, you have a clean driving record, you don't use your vehicle for work purposes, you don't travel often, you're vehicle has anti-theft devices, you park in a garage, etc. A good idea would be to make a list of why you're at a lower risk before you even speak to an agent. Be creative!

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