Almost every state has a mandatory car insurance law that requires every driver of an automobile to be covered by at least a basic car insurance policy. The problem is, most people don't know what the basic coverage is and often end up paying for more than what they need. You can save hundreds of dollars by knowing what you are required, by law, to have and what you don't really need. Insurance companies are a business and all businesses want to make a profit but not all insurance companies are out to rip you off. All insurance agents are required to give you the facts as to what the basic coverage, as mandated by the state law, is; if your agent doesn't give you this bare-bone information, find an agent who will.
There are many factors that determine how much car insurance coverage you will need. If you own a new car and are making payments to a financial institution for that car, that institution will likely require you to carry a full coverage policy on that automobile in order for them to recover the lending amount should that vehicle be involved in an accident and be considered a total loss. However, if you owe nothing on the car and hold the outright title to it, it is your prerogative whether or not you wish to cover that vehicle fully or just carry the legal limit as required by the state you live in.
Other factors that determine how much you will pay for car insurance include:
* The type of car you drive. Insurance on sports cars is higher than for a family type car.
* Age of the car. The older the car is the less the coverage will cost.
* Driving record. An individual who has not had any accidents or tickets will pay much less for automobile insurance than a person who has had accidents and tickets.
* Miles driven daily. How you use your car and how far you drive that car daily will determine how much your insurance premium will be.
* Credit report. Individuals with a good or excellent credit report will pay less for car insurance compared to individuals who have a poor credit report.
Before you purchase your car insurance policy do a little research to understand the terminology used by insurance agents. You should also be keenly aware of the state mandatory laws concerning car insurance and what you must carry compared to what you can carry. You also need to figure out how much coverage you truly want to have. There are many additions to a policy that you may or may not want, such as roadside assistance, rental car reimbursement, and towing coverage, just to name a few. Knowing how much your car is worth will help you narrow down how much coverage you will need in case you are in an accident and will need to replace your car. Knowing all these different factors before talking to an agent can help you get cheap car insurance that keeps you legal but doesn't stress you financially.
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Chris Robertson is an author of Majon International, one of the worlds MOST popular internet marketing companies.
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