Passenger Car Insurance

Automobile insurance is the first type of insurance that most individuals purchase because cars are so important in our society.

Autos are keys to independence and mobility as well as representing a status symbol. Americans are not likely to lose their love for automobiles soon, so a reasonable person should know the ramifications, uses, and types of auto insurance to purchase.

Automobile insurance is a significant portion of your insurance budget. Be sure to always compare quotes using our FREE search tool above!

State Requirements for Automobile Insurance

Every state has its own requirements for licensing of drivers and requirements for automobile insurance. Finding these requirements sometimes takes an exhaustive search of state insurance departments on the Internet.

An easy way to locate your state's insurance website is by accessing the National Association of Insurance Commissioners (NAIC) & The Center for Insurance Policy and Research (CIS).

A map of the United States will appear and clicking upon your state's name will bring up your particular state's insurance website. Most states indicate their current requirements for liability insurance on their website.

Types of Insurance for Automobiles and Suggested Limits

There are several types of insurance to choose from:

Liability Insurance

Liability insurance provides protection to defray your legal responsibility for injury to the persons of others and their property in the event of an automobile accident. To protect yourself, plan to purchase at least the following limits:

• Bodily injury liability - $100,000 per person and $300,000 per accident – this provides payments for not only injuries to others, but legal fees, rehabilitation costs, or wrongful death levies
• Property damage liability - $50,000 per person – provides payments for the property of others should you damage it with your vehicle
• Medical payments coverage - $2000 per accident – provides additional medical coverage for you and your family in an accident for emergency services and medical needs
• Uninsured and underinsured motorists coverage – $100,000 per person and $300,000 per accident – which pays for injury to you and your family if you are involved in an accident with a driver who has no insurance or does not carry enough insurance

Coverage for Damage to Your Own Vehicle

Liability insurance does not pay for damage to your own vehicle, so you must protect your investment in your car with this type of insurance. This is even more necessary if you have borrowed from a bank or loan company for the car, or if you have leased the vehicle.

Two types of insurance are necessary to protect your vehicle from most hazards:

• Comprehensive insurance – protects your vehicle from incidents other than a car accident such as theft, vandalism, falling objects, glass, weather, and collision with animals
• Collision insurance – protects your vehicle from collisions from accidents, including those for which you may be at fault.

Both Comprehensive and Collision are ordinarily modified by deductibles. Deductibles are the amounts that you, as automobile owner, agree to pay in the even of an occurrence. You can use deductibles to save money on your insurance premiums.

They come graduated from $250 to $1,000 depending upon the amount you can afford to pay. Remember that the deductible amount is removed from claims for every claim that occurs. For example, a glass claim one month can cost you out-of-pocket $250 one month – and then, if a rock strikes the windshield the next month, another $250 that month.

Saving Money on Insurance

There are a number of methods of saving money on insurance, but the most useful one is to acquire at least three quotations for your insurance.

Insurance company's rates vary because of their differing experiences in the insurance market in your state. One company may have a great many claims, whereas another may have fewer and this affects their rate promulgations.

Things That Can Affect Your Rates and Why

• Make and model of your car – luxury vehicles and sports cars cost more to repair – thus to insure
• Driving record – individuals with poor driving records tend to have more accidents
• Use of your car – higher mileage equates to more accidents
• Gender – males tend to have more accidents than females
• Age – Young drivers and older drivers – above 65 – tend to have more accidents. Younger drivers have less experience and older drivers tend to have more cognitive problems
• Where you live – people in rural areas tend to have fewer accidents than ones in urban areas

Every insurance company has its own discounts, so ask about them. Good student discounts, driver's education courses, multiple vehicles, anti-theft devices, low mileage, and safety devices can all be a reason for discounts.

Examine Companies and Agents Carefully

Every state requires insurance agents and companies to be licensed in their state to sell insurance. The states keep track of complaints about both companies and agencies and this is usually available on their websites. A general review of insurance complaints is available on the NAIC & CIS website.

Examine the financial stability of the insurance company you choose by consulting insurance rating services such as:

• The National Association of Insurance Commissioners website
• A. M. Best through Best's Rating and Analysis website
• JD Power Insurance index

Unfortunately, insurance fraud is a lucrative business, so check with your state's insurance office to examine licenses of the agencies and companies from which you purchase insurance. Examine and check with your local Better Business Bureau to investigate complaints they may have also. Informed consumers are much less likely to be victims.

Obtaining an Insurance Quote

Prepare yourself with the information you will need to request a quotation:

• Desired limits of liability
• Deductibles you want to apply to your vehicles
• Name, date of birth, and driving license numbers for each individual that drives your vehicles
• Make, model, and VIN number for all owned cars
• Driving records for drivers and what vehicle they usually drive
• Annual mileage for each vehicle

Make certain that the requests you complete are the same for all insurance companies for which you apply. This allows you to compare equally the premium provided. Be careful not to skip insuring any vehicles because failure to include a vehicle could invalidate your insurance.

If you are in the military, some companies will make adjustments for the periods of time you are on deployment out of the United States. Some will allow you to make your insurance inactive for that period. Be certain, though, that no one will be driving the vehicle while the insurance is inactive.

Read Your Policy

It is easy to ignore the necessity of reading insurance policies when they arrive. Check them for accuracy and know the terms of the policy. If you do not understand something, be certain to ask the company or agent. Remember, an insurance policy is a legal contract.

Enter your ZIP code into the FREE auto insurance comparison tool below to start your search now!