How much you pay for car insurance depends on several factors , including age and marital status , residence , and what you drive . You can not do anything about your age , and few people will move just to lower their insurance premiums . You can , however , choose a vehicle that costs less to insure .
In this article , we will give you all the tips you need when getting car insurance .
What is your car insurance actually insuring ? While you buy a single insurance policy that covers certain vehicles , a number of components make the final cost :
Injuries liability : Covers injury and death claims against you , and legal costs , if your car injures or kills someone .
Property damage Liability : Covers claims for property damage in an accident your car . Because liability coverage protects the other party , is required in all but three states .
Medical payments : Pays for injuries to yourself and to occupants of your car . It is optional in some countries . In "no - fault" states , personal injury protection replaces medical payments as part of the basic coverage .
Uninsured motorist protection : Covers injuries caused to you or occupants of your car with a driver who is not insured or hit - and - run . " Under - insured " coverage also is available , to cover claims you may make against a driver who has inadequate insurance . In some countries , as many as 30 percent of drivers are uninsured .
Collision coverage : Covers damage to your car up to the value of the book . Collision coverage carries deductible , which is the amount per claim you have to pay before the insurance applies . The lower the deductible , the higher the premium . Although it is legally optional , a lending institution or a rental company usually requires collision coverage .
Comprehensive ( physical damage ) : Covers damage to your car from theft , vandalism , fire , wind , floods , and other causes of non - accident . Comprehensive also carries a deductible .
2 . Your vehicle Affect Your Premium
How much you pay for car insurance depends on several factors , including age and marital status , residence , and what you drive . You can not do anything about your age , and few people will move just to lower their insurance premiums . You can , however , choose a vehicle that costs less to insure .
In this article , we will give you all the tips you need when getting car insurance .
What is your car insurance actually insuring ? While you buy a single insurance policy that covers certain vehicles , a number of components make the final cost :
Injuries liability : Covers injury and death claims against you , and legal costs , if your car injures or kills someone .
Property damage Liability : Covers claims for property damage in an accident your car . Because liability coverage protects the other party , is required in all but three states .
Medical payments : Pays for injuries to yourself and to occupants of your car . It is optional in some countries . In "no - fault" states , personal injury protection replaces medical payments as part of the basic coverage .
Uninsured motorist protection : Covers injuries caused to you or occupants of your car with a driver who is not insured or hit - and - run . " Under - insured " coverage also is available , to cover claims you may make against a driver who has inadequate insurance . In some countries , as many as 30 percent of drivers are uninsured .
Collision coverage : Covers damage to your car up to the value of the book . Collision coverage carries deductible , which is the amount per claim you have to pay before the insurance applies . The lower the deductible , the higher the premium . Although it is legally optional , a lending institution or a rental company usually requires collision coverage .
Comprehensive ( physical damage ) : Covers damage to your car from theft , vandalism , fire , wind , floods , and other causes of non - accident . Comprehensive also carries a deductible .
You may want a sports car or a fancy SUV , but your insurance company may charge you more to protect you while driving it .
Insurance premiums are based partly on the price of the vehicle , which affects the replacement cost if it is stolen or " reach " in an accident . How expensive vehicle to repair - including parts and labor - can also affect the cost . Moreover , additional charges may apply to vehicles that are often stolen or involved in an accident .
Industry - wide information on injury claims , collision repair costs and theft rates by vehicle models available from the Highway Loss Data Institute ( HLDI ) . You can write them at 1005 North Glebe Road , Arlington , VA 22201 . HLDI affiliated with the Insurance Institute for Highway Safety ( IIHS ) .
According to HLDI , the lowest injury claims are from large vehicles - cars , pickup trucks , and sport utility vehicles . Small 2 - and 4 - door cars have the highest injury claims . Small cars also are among the highest in collision costs , along with sports cars .
If you have your heart set on a sporty vehicle , you'll probably pay dearly . Insuring a high -performance car can easily cost two or three times the insurance amount for regular models .
Sport utility vehicles , the hottest market segment , often have higher insurance rates than mid and full-size cars , but some SUV models are relatively cheap to insure . SUVs are " hot " for another reason : They are one of the most frequently stolen vehicles , and they are more expensive than most cars . Cadillac Escalade is currently the most popular model sought by thieves , but it's followed by the Nissan Maxima sedan . SUVs also can cost more to fix after an accident if the system 4 - wheel - drive is damaged .
However , insurance companies set rates based on their own experience . If Company A has more collision and theft claims for a particular vehicle from Company B , then A will charge more for the same coverage . It all boils down to the company's actual experience with a particular vehicle or driver categories . That's why it pays to shop around for insurance .
3 . Yourself Affect Your Premium
How much you pay for car insurance depends on several factors , including age and marital status , residence , and what you drive . You can not do anything about your age , and few people will move just to lower their insurance premiums . You can , however , choose a vehicle that costs less to insure .
In this article , we will give you all the tips you need when getting car insurance .
What is your car insurance actually insuring ? While you buy a single insurance policy that covers certain vehicles , a number of components make the final cost :
Injuries liability : Covers injury and death claims against you , and legal costs , if your car injures or kills someone .
Property damage Liability : Covers claims for property damage in an accident your car . Because liability coverage protects the other party , is required in all but three states .
Medical payments : Pays for injuries to yourself and to occupants of your car . It is optional in some countries . In "no - fault" states , personal injury protection replaces medical payments as part of the basic coverage .
Uninsured motorist protection : Covers injuries caused to you or occupants of your car with a driver who is not insured or hit - and - run . " Under - insured " coverage also is available , to cover claims you may make against a driver who has inadequate insurance . In some countries , as many as 30 percent of drivers are uninsured .
Collision coverage : Covers damage to your car up to the value of the book . Collision coverage carries deductible , which is the amount per claim you have to pay before the insurance applies . The lower the deductible , the higher the premium . Although it is legally optional , a lending institution or a rental company usually requires collision coverage .
Comprehensive ( physical damage ) : Covers damage to your car from theft , vandalism , fire , wind , floods , and other causes of non - accident . Comprehensive also carries a deductible .
You may want a sports car or a fancy SUV , but your insurance company may charge you more to protect you while driving it .
Insurance premiums are based partly on the price of the vehicle , which affects the replacement cost if it is stolen or " reach " in an accident . How expensive vehicle to repair - including parts and labor - can also affect the cost . Moreover , additional charges may apply to vehicles that are often stolen or involved in an accident .
Industry - wide information on injury claims , collision repair costs and theft rates by vehicle models available from the Highway Loss Data Institute ( HLDI ) . You can write them at 1005 North Glebe Road , Arlington , VA 22201 . HLDI affiliated with the Insurance Institute for Highway Safety ( IIHS ) .
According to HLDI , the lowest injury claims are from large vehicles - cars , pickup trucks , and sport utility vehicles . Small 2 - and 4 - door cars have the highest injury claims . Small cars also are among the highest in collision costs , along with sports cars .
If you have your heart set on a sporty vehicle , you'll probably pay dearly . Insuring a high -performance car can easily cost two or three times the insurance amount for regular models .
Sport utility vehicles , the hottest market segment , often have higher insurance rates than mid and full-size cars , but some SUV models are relatively cheap to insure . SUVs are " hot " for another reason : They are one of the most frequently stolen vehicles , and they are more expensive than most cars . Cadillac Escalade is currently the most popular model sought by thieves , but it's followed by the Nissan Maxima sedan . SUVs also can cost more to fix after an accident if the system 4 - wheel - drive is damaged .
However , insurance companies set rates based on their own experience . If Company A has more collision and theft claims for a particular vehicle from Company B , then A will charge more for the same coverage . It all boils down to the company's actual experience with a particular vehicle or driver categories . That's why it pays to shop around for insurance .
Factors that you can least control may have the greatest impact on your insurance costs . Your age , gender , and driving record are key factors that affect your insurance premium .
Single males under the age of 25 pay the highest price . Statistics show that they are involved in the most accidents , so insurance companies charge young men higher premiums than women of the same age . Married men , who statistically fewer accidents , pay less than single men . Some states do not allow rates based on sex or age , but that prohibition tends to result in higher rates for women , not lower rates for men .
If you are convicted of moving traffic violations or has an accident , your premiums will likely go up , no matter what your age . Drivers with clean records - no tickets , no accidents - pay the lowest price .
Where you live also plays a big role in how much you pay . Urban areas , with their greater population densities and heavier traffic , get higher rates than rural areas . According to the Insurance Information Institute , the average insurance expenditure in mainly urban New Jersey - traditionally the most expensive state - in 2002 was more than double that of North Dakota , a rural state with the lowest average premiums . High costs in states like Florida , Massachusetts and New York are attributed to growth in fraud and theft .
In most states , too , insurers determine the zip code level . If you live in a major city like Chicago or Los Angeles , you will probably pay more than if you lived in a nearby suburb .
4 . Decide How Much Coverage You Need
How much you pay for car insurance depends on several factors , including age and marital status , residence , and what you drive . You can not do anything about your age , and few people will move just to lower their insurance premiums . You can , however , choose a vehicle that costs less to insure .
In this article , we will give you all the tips you need when getting car insurance .
What is your car insurance actually insuring ? While you buy a single insurance policy that covers certain vehicles , a number of components make the final cost :
Injuries liability : Covers injury and death claims against you , and legal costs , if your car injures or kills someone .
Property damage Liability : Covers claims for property damage in an accident your car . Because liability coverage protects the other party , is required in all but three states .
Medical payments : Pays for injuries to yourself and to occupants of your car . It is optional in some countries . In "no - fault" states , personal injury protection replaces medical payments as part of the basic coverage .
Uninsured motorist protection : Covers injuries caused to you or occupants of your car with a driver who is not insured or hit - and - run . " Under - insured " coverage also is available , to cover claims you may make against a driver who has inadequate insurance . In some countries , as many as 30 percent of drivers are uninsured .
Collision coverage : Covers damage to your car up to the value of the book . Collision coverage carries deductible , which is the amount per claim you have to pay before the insurance applies . The lower the deductible , the higher the premium . Although it is legally optional , a lending institution or a rental company usually requires collision coverage .
Comprehensive ( physical damage ) : Covers damage to your car from theft , vandalism , fire , wind , floods , and other causes of non - accident . Comprehensive also carries a deductible .
You may want a sports car or a fancy SUV , but your insurance company may charge you more to protect you while driving it .
Insurance premiums are based partly on the price of the vehicle , which affects the replacement cost if it is stolen or " reach " in an accident . How expensive vehicle to repair - including parts and labor - can also affect the cost . Moreover , additional charges may apply to vehicles that are often stolen or involved in an accident .
Industry - wide information on injury claims , collision repair costs and theft rates by vehicle models available from the Highway Loss Data Institute ( HLDI ) . You can write them at 1005 North Glebe Road , Arlington , VA 22201 . HLDI affiliated with the Insurance Institute for Highway Safety ( IIHS ) .
According to HLDI , the lowest injury claims are from large vehicles - cars , pickup trucks , and sport utility vehicles . Small 2 - and 4 - door cars have the highest injury claims . Small cars also are among the highest in collision costs , along with sports cars .
If you have your heart set on a sporty vehicle , you'll probably pay dearly . Insuring a high -performance car can easily cost two or three times the insurance amount for regular models .
Sport utility vehicles , the hottest market segment , often have higher insurance rates than mid and full-size cars , but some SUV models are relatively cheap to insure . SUVs are " hot " for another reason : They are one of the most frequently stolen vehicles , and they are more expensive than most cars . Cadillac Escalade is currently the most popular model sought by thieves , but it's followed by the Nissan Maxima sedan . SUVs also can cost more to fix after an accident if the system 4 - wheel - drive is damaged .
However , insurance companies set rates based on their own experience . If Company A has more collision and theft claims for a particular vehicle from Company B , then A will charge more for the same coverage . It all boils down to the company's actual experience with a particular vehicle or driver categories . That's why it pays to shop around for insurance .
Factors that you can least control may have the greatest impact on your insurance costs . Your age , gender , and driving record are key factors that affect your insurance premium .
Single males under the age of 25 pay the highest price . Statistics show that they are involved in the most accidents , so insurance companies charge young men higher premiums than women of the same age . Married men , who statistically fewer accidents , pay less than single men . Some states do not allow rates based on sex or age , but that prohibition tends to result in higher rates for women , not lower rates for men .
If you are convicted of moving traffic violations or has an accident , your premiums will likely go up , no matter what your age . Drivers with clean records - no tickets , no accidents - pay the lowest price .
Where you live also plays a big role in how much you pay . Urban areas , with their greater population densities and heavier traffic , get higher rates than rural areas . According to the Insurance Information Institute , the average insurance expenditure in mainly urban New Jersey - traditionally the most expensive state - in 2002 was more than double that of North Dakota , a rural state with the lowest average premiums . High costs in states like Florida , Massachusetts and New York are attributed to growth in fraud and theft .
In most states , too , insurers determine the zip code level . If you live in a major city like Chicago or Los Angeles , you will probably pay more than if you lived in a nearby suburb .
While it is dangerous to be underinsured , having too much insurance can be a costly mistake as well . Without insurance , your property is at risk in an accident that is your fault . The minimum amount of insurance required in your state is quite rare .
State law may require liability coverage for as little as $ 15,000 per person , $ 30,000 per accident and $ 5,000 property damage . About half of the states require $ 25,000 per person and $ 50,000 per accident . Half of them require $ 10,000 in property damage coverage . If you can afford it , buy more than the minimum . After all , $ 10,000 for property damage may not be enough if you hit a $ 100,000 Mercedes - Benz .
The more assets and income you have, the more insurance you need . Most insurers recommend liability coverage of at least $ 100,000 per person , $ 300,000 per accident , and $ 50,000 property damage if you have assets to protect , such as home . Some insurance companies also recommend " personal umbrella liability " policy of $ 1,000,000 issued in conjunction with homeowner coverage . State Farm reports that the average coverage of the $ 270 a year , but the amount varies greatly depending on location and other factors . " Umbrella " policy can protect a family from financial ruin in a major lawsuit .
Like buying a car , there is no single best solution when it comes to buying insurance . Prices vary . Surveys show that you can pay anywhere from $ 500 to $ 2,000 per year for the same coverage from different companies . Shopping for insurance by consulting two or three largest insurance companies , like State Farm and Allstate . Then , contact one or two independent agents who can quote premiums from more than one company . In addition , there are direct marketing companies , such as GEICO and Progressive , which do business over the phone rather than through agents and offer some of the lowest prices . Ask for an itemized list of the coverage and costs .
" We are price competitive , " said spokesman Dick Luedke of State Farm , the rate declined slightly during 2004 . But with so many factors involved in determining the rate , it is wise to check out some prospects .
In 2004 , the average price of car insurance nationwide is $ 871 , according to the Insurance Information Institute . They expect that the cost of car insurance will rise by 3.5 percent in 2004 , which would be the smallest increase in four years .
Do not forget the internet . Many companies now offer online quotes , and insurance shopping on the Web allows you to compare rates from multiple providers in the comfort of your own home .
5 You Can Reduce Your Premiums
How much you pay for car insurance depends on several factors , including age and marital status , residence , and what you drive . You can not do anything about your age , and few people will move just to lower their insurance premiums . You can , however , choose a vehicle that costs less to insure .
In this article , we will give you all the tips you need when getting car insurance .
What is your car insurance actually insuring ? While you buy a single insurance policy that covers certain vehicles , a number of components make the final cost :
Injuries liability : Covers injury and death claims against you , and legal costs , if your car injures or kills someone .
Property damage Liability : Covers claims for property damage in an accident your car . Because liability coverage protects the other party , is required in all but three states .
Medical payments : Pays for injuries to yourself and to occupants of your car . It is optional in some countries . In "no - fault" states , personal injury protection replaces medical payments as part of the basic coverage .
Uninsured motorist protection : Covers injuries caused to you or occupants of your car with a driver who is not insured or hit - and - run . " Under - insured " coverage also is available , to cover claims you may make against a driver who has inadequate insurance . In some countries , as many as 30 percent of drivers are uninsured .
Collision coverage : Covers damage to your car up to the value of the book . Collision coverage carries deductible , which is the amount per claim you have to pay before the insurance applies . The lower the deductible , the higher the premium . Although it is legally optional , a lending institution or a rental company usually requires collision coverage .
Comprehensive ( physical damage ) : Covers damage to your car from theft , vandalism , fire , wind , floods , and other causes of non - accident . Comprehensive also carries a deductible .
You may want a sports car or a fancy SUV , but your insurance company may charge you more to protect you while driving it .
Insurance premiums are based partly on the price of the vehicle , which affects the replacement cost if it is stolen or " reach " in an accident . How expensive vehicle to repair - including parts and labor - can also affect the cost . Moreover , additional charges may apply to vehicles that are often stolen or involved in an accident .
Industry - wide information on injury claims , collision repair costs and theft rates by vehicle models available from the Highway Loss Data Institute ( HLDI ) . You can write them at 1005 North Glebe Road , Arlington , VA 22201 . HLDI affiliated with the Insurance Institute for Highway Safety ( IIHS ) .
According to HLDI , the lowest injury claims are from large vehicles - cars , pickup trucks , and sport utility vehicles . Small 2 - and 4 - door cars have the highest injury claims . Small cars also are among the highest in collision costs , along with sports cars .
If you have your heart set on a sporty vehicle , you'll probably pay dearly . Insuring a high -performance car can easily cost two or three times the insurance amount for regular models .
Sport utility vehicles , the hottest market segment , often have higher insurance rates than mid and full-size cars , but some SUV models are relatively cheap to insure . SUVs are " hot " for another reason : They are one of the most frequently stolen vehicles , and they are more expensive than most cars . Cadillac Escalade is currently the most popular model sought by thieves , but it's followed by the Nissan Maxima sedan . SUVs also can cost more to fix after an accident if the system 4 - wheel - drive is damaged .
However , insurance companies set rates based on their own experience . If Company A has more collision and theft claims for a particular vehicle from Company B , then A will charge more for the same coverage . It all boils down to the company's actual experience with a particular vehicle or driver categories . That's why it pays to shop around for insurance .
Factors that you can least control may have the greatest impact on your insurance costs . Your age , gender , and driving record are key factors that affect your insurance premium .
Single males under the age of 25 pay the highest price . Statistics show that they are involved in the most accidents , so insurance companies charge young men higher premiums than women of the same age . Married men , who statistically fewer accidents , pay less than single men . Some states do not allow rates based on sex or age , but that prohibition tends to result in higher rates for women , not lower rates for men .
If you are convicted of moving traffic violations or has an accident , your premiums will likely go up , no matter what your age . Drivers with clean records - no tickets , no accidents - pay the lowest price .
Where you live also plays a big role in how much you pay . Urban areas , with their greater population densities and heavier traffic , get higher rates than rural areas . According to the Insurance Information Institute , the average insurance expenditure in mainly urban New Jersey - traditionally the most expensive state - in 2002 was more than double that of North Dakota , a rural state with the lowest average premiums . High costs in states like Florida , Massachusetts and New York are attributed to growth in fraud and theft .
In most states , too , insurers determine the zip code level . If you live in a major city like Chicago or Los Angeles , you will probably pay more than if you lived in a nearby suburb .
While it is dangerous to be underinsured , having too much insurance can be a costly mistake as well . Without insurance , your property is at risk in an accident that is your fault . The minimum amount of insurance required in your state is quite rare .
State law may require liability coverage for as little as $ 15,000 per person , $ 30,000 per accident and $ 5,000 property damage . About half of the states require $ 25,000 per person and $ 50,000 per accident . Half of them require $ 10,000 in property damage coverage . If you can afford it , buy more than the minimum . After all , $ 10,000 for property damage may not be enough if you hit a $ 100,000 Mercedes - Benz .
The more assets and income you have, the more insurance you need . Most insurers recommend liability coverage of at least $ 100,000 per person , $ 300,000 per accident , and $ 50,000 property damage if you have assets to protect , such as home . Some insurance companies also recommend " personal umbrella liability " policy of $ 1,000,000 issued in conjunction with homeowner coverage . State Farm reports that the average coverage of the $ 270 a year , but the amount varies greatly depending on location and other factors . " Umbrella " policy can protect a family from financial ruin in a major lawsuit .
Like buying a car , there is no single best solution when it comes to buying insurance . Prices vary . Surveys show that you can pay anywhere from $ 500 to $ 2,000 per year for the same coverage from different companies . Shopping for insurance by consulting two or three largest insurance companies , like State Farm and Allstate . Then , contact one or two independent agents who can quote premiums from more than one company . In addition , there are direct marketing companies , such as GEICO and Progressive , which do business over the phone rather than through agents and offer some of the lowest prices . Ask for an itemized list of the coverage and costs .
" We are price competitive , " said spokesman Dick Luedke of State Farm , the rate declined slightly during 2004 . But with so many factors involved in determining the rate , it is wise to check out some prospects .
In 2004 , the average price of car insurance nationwide is $ 871 , according to the Insurance Information Institute . They expect that the cost of car insurance will rise by 3.5 percent in 2004 , which would be the smallest increase in four years .
Do not forget the internet . Many companies now offer online quotes , and insurance shopping on the Web allows you to compare rates from multiple providers in the comfort of your own home .
The biggest difference you can make is to buy a vehicle that qualifies for a discount or at least does not carry a surcharge. Ask your insurance agent about the cost of insuring vehicles you are interested in before you make your purchase decision . Here are some other ways you can save money on your car insurance :
Most companies give a break to those who drive less than 7500 miles per year . If you take public transportation instead of driving to work , your premium will go down . Out of the question ? Try carpooling .
Make sure you get all the discounts you are entitled to . You may qualify if your vehicle has an alarm , for example . Discounts used to be given to safety features such as airbags , but they fade as the items become more common . Discounts may also be available if you insure your vehicles and your home with the same company . People who pass a defensive - driving course or do not smoke or drink often get discounts .
Review the status of all the drivers in your family with your agent . Most discounts apply only to one part of the policy , so do not expect dramatic savings .
Increase your deductible for collision and comprehensive . Switching from a $ 100 deductible to $ 1000 can reduce the collision portion of premiums by 30 percent , said Luedke . You will still be covered for the disaster , but you pay the bill for fender - benders . Also , think twice about filing small claims with your insurance : Why risk a premium hike ?
Shop around . Not just renewing , study the fine print of your policy to see if its terms - or your situation - have changed . Another company might have better rates , but you will not know unless you shop . Most insurers provide rate over the phone and many via online computer services , making it easy to compare premiums .
Drop collision coverage on older cars . Claims are limited to " book " value , so you will not get much anyway if you car is more than seven years old . Good rule of thumb is to drop collision when the annual premium reaches 10 percent of the value of your car .
Be a good driver . Avoid accidents and traffic violations and you will be rewarded with good - driver discounts . Bad driving is expensive . The " safer you can be " on the road , Luedke said , " the lower your premium . "
Drop coverage for extras such as towing costs or the cost of renting a car while you are in the store . The savings may be small , but your roadside assistance warranty may give their new car at no cost .
Is your teenager share the family car instead of owning his own . Be sure to tell your agent if your son or daughter makes the honor roll or moves away to college . Both qualify for discounts with most companies .
If your group health insurance provides generous coverage , consider dropping medical payments portion of your policy .
Keep your credit rating healthy . More and more insurance companies consider a person's credit score when setting the rate .
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