Important Tips to Save Money on Auto Insurance


Auto insurance is insurance on vehicles, especially motor vehicles like cars, vans, and motorcycles. Its main function is to offer financial coverage against physical damage or injury resulting from road accidents and from liability which can also arise due to unexpected events in a vehicle. It provides compensation to the insured for any loss or damage which may occur as a result of auto accidents. In United States, it is mandatory for all vehicles to have a minimum amount of liability insurance. The auto insurance coverage varies from one state to another. Some states may even impose some extra charges as a penalty on those who fail to acquire auto insurance before coming on the road.

Before investing in auto insurance, it is advisable to study the premium rates offered by different insurance companies and compare them to find out the one that provides you with the lowest cost. It is also necessary to find out the terms and conditions of the insurance company. The premium rates are determined after various factors are considered like model of your car, location, driving experience of the driver, age and gender of the driver, credit history, and others. There may be certain circumstances which may lead to higher premiums like adding an expensive alarm system to your car which can sometimes attract higher rates, installing anti-theft devices in your car and so on. You can avoid such situations by maintaining the good driving record in the past.

There are many types of auto policies available and there are many ways to obtain them like obtaining it directly from the insurer, taking a third party policy or a policy of auto insurance brokerage. You can choose any type of auto policy, however, it is important that you understand fully about the terms and conditions of the policy before investing in it. It is a good idea to research online to find out more about different auto policies. You can also talk to people who have already purchased auto policies and ask them about the best deals and about their experience in purchasing auto policy.

Depending on your requirement, you can purchase the optional covers. PIP insurance provides coverage for property damage due to a car accident and for medical expenses. PIP coverage is mandatory in some states like Washington. If you have the legal documents, you can choose to include this cover in your policy or you can take a policy of minimum of PIP and augment it with optional covers like collision coverage, comprehensive coverage and uninsured motorist coverage. It is important to keep in mind that if you do not have the legal documents, you can purchase the optional covers separately.

Another important way to save money on auto coverage options is to make use of the higher deductible while taking a policy of lower premium. This helps you to save money on monthly premium but you will have to spend the higher deductible in case of accidents. It is advisable to consider combining your home and auto policy if you have a home-based business or if you are single and living alone. In this case, you will get a discount on premiums from both the policies.

Make sure that you choose the one that covers both comprehensive damage and liability. Remember to add the deductible in case of any accident. You can also get a discount for purchasing an auto insurance plan that offers you multiple covers for liability, bodily injury and property damage. In such a case, the excess amount will be paid by you.