Car Negotiation Coach

The following is a guest post by Elizabeth from CarInsuranceCompanies.com

Do you think of car insurance as a nuisance that drains cash out of your bank account? Are you confused about all the options and fine print? This car insurance guide demystifies auto insurance and helps you save money in the process. Be sure that you not only find the best car price but also find the best price on car insurance!

Top 5 Reasons to Buy Car Insurance

1. Car insurance can pay for repairs and rental expenses if your vehicle is vandalized, stolen, or damaged by fire, flood, animals, hail, wind, or collisions.
2. After an accident, auto insurance can prevent sizable, out-of-pocket medical bills and legal fees.
3. Insurance policies provide peace of mind. They can shield you from the cost of minor and major damages–from lamp posts and mailboxes to buildings and luxury vehicles.
4. Car insurance can provide the same protections to other people who drive your car, sometimes even if they are not specifically listed on the policy.
5. It’s the law! Owning adequate car insurance and meeting financial responsibility laws is a necessity across virtually all 50 states. If your vehicle is being leased or financed, most lenders mandate a certain level of auto insurance.

Understanding Your Policy

The basic components of any car insurance policy are the premiums, deductibles, and coverage limits.

Premiums

Premiums are the amounts that must be paid on a regular basis to keep insurance coverage active, or “in force”. Payments are made monthly, quarterly, semi-annually, or annually. The amount charged for car insurance depends on several factors, including:

• Vehicle type (Vehicles that have expensive replacement parts or are frequently stolen cost more.)
• Vehicle location (Areas with a high number of accidents or thefts raise insurance premiums.)
• Personal driving record (Drivers with multiple accidents and tickets pay more for insurance than drivers with clean records.)
• Miles driven (The U.S. Department of Transportation estimates that drivers are involved in a crash approximately every 500,000 miles. Insurance companies equate higher mileage with an increased potential for accidents and claims.)
• Age (Seniors are generally cautious drivers and receive the lowest insurance rates. Inexperienced teenagers pay the most for car insurance.)
• Credit score (Insurance companies give lower rates to individuals with good credit because they are more likely to pay their premiums and less likely to submit claims.)
• Coverage (High coverage limits increase the potential for insurers to pay for huge claims, so they raise insurance premiums accordingly.)
• Discounts (Most car insurance companies offer discounts for good behavior. A list of common discounts is presented below.)

Deductibles

The deductible is the amount that must be spent out-of-pocket before the insurance company will pay anything on a claim. Car insurance policies have two deductibles: one for collisions and another for comprehensive damage such as hail, fire, or vandalism. Common deductibles are $250, $500, or $1,000. Raising the deductible lowers the monthly payments, but policyowners should always keep deductibles at a size they can afford.

Liability Limits

Some drivers are tempted to save a few dollars by purchasing only the minimum levels of insurance required in the state. These drivers should keep in mind that accidents frequently cost more than the state minimums, especially with newer vehicles and expensive hybrid/electric technology. Most insurance professionals recommend minimum bodily injury coverage of $100,000 per person and $300,000 per accident.

Minimum Coverage By State

Understanding car insurance quotes can be confusing. Policy limits are represented by three numbers, such as 25/50/15 (25 equals $25,000, 50 equals $50,000, etc.).

• The first number is the maximum amount a car insurance company will pay for one person’s injuries in an accident.
• The second number is the maximum payable for all injuries in that accident.
• The third number defines the maximum that will be paid for property damage in that same accident.

Drivers must meet their state minimums for car insurance as defined below:

• Alabama 25/50/25
• Alaska 50/100/25
• Arizona 15/30/10
• Arkansas 25/50/25
• California 15/30/5
• Colorado 25/50/15
• Connecticut 20/40/10
• Delaware 15/30/10
• Florida 10/20/10
• Georgia 25/50/25
• Hawaii 20/40/10
• Idaho 25/50/15
• Illinois 20/40/15
• Indiana 25/50/10
• Iowa 20/40/15
• Kansas 25/50/10
• Kentucky 25/50/10
• Louisiana 15/30/25
• Maine 50/100/25
• Maryland 20/40/15
• Massachusetts 20/40/5
• Michigan 20/40/10
• Minnesota 30/60/10
• Mississippi 25/50/25
• Missouri 25/50/10
• Montana 25/50/10
• Nebraska 25/50/25
• Nevada 15/30/10
• New Hampshire 25/50/25
• New Jersey 15/30/5
• New Mexico 25/50/10
• New York 25/50/10
• North Carolina 30/60/25
• North Dakota 25/50/25
• Ohio 12.5/25/7.5
• Oklahoma 25/50/25
• Oregon 25/50/10
• Pennsylvania 15/30/5
• Rhode Island 25/50/25
• South Carolina 25/50/25
• South Dakota 25/50/25
• Tennessee 25/50/15
• Texas 25/50/25
• Utah 25/65/15
• Vermont 25/50/10
• Virginia 25/50/20
• Washington 25/50/10
• Washington, D.C. 25/50/10
• West Virginia 20/40/10
• Wisconsin 50/100/55
• Wyoming 25/50/20

In addition, the following states require Personal Injury Protection (PIP). PIP pays for the medical expenses, lost income, childcare, funeral expenses, and/or survivor benefits of someone injured in an accident:

• Arkansas
• Delaware
• Florida
• Hawaii
• Kansas
• Kentucky
• Maryland
• Massachusetts
• Michigan
• Minnesota
• New Jersey
• New York
• North Dakota
• Oregon
• Pennsylvania
• Utah

These states also require Uninsured Motorist coverage, which protects against damage and injuries caused by an uninsured or underinsured driver:

• Connecticut
• Illinois
• Kansas
• Maine
• Maryland
• Massachusetts
• Minnesota
• Missouri
• New Hampshire
• New Jersey
• New York
• North Carolina
• North Dakota
• Oregon
• Rhode Island
• South Carolina
• South Dakota
• Virginia
• Washington D.C.
• West Virginia
• Wisconsin

Auto Insurance Discounts

Through discounts, policyowners can reduce their auto insurance premiums by as much as 20%. Common money-saving opportunities include:

• Insuring multiple vehicles or holding homeowners, renters, and auto insurance policies with the same company
• Being a loyal customer for over three years
• Not having accidents or moving violations for at least the previous three years
• Being a member of the military or a particular professional group
• Being a good student
• Opting into electronic statements
• Passing a defensive driving class
• Driving less than 10,000 miles per year
• Owning a vehicle with airbags, anti-lock brakes, or anti-theft devices

Car insurance does not have to be expensive or confusing. Use the information and tips above to get the best rates on both new or used vehicles.

Get a personalized car buying strategy guide to learn how to buy a new car at the best possible price. It only takes a few seconds and could save you thousands of dollars! Did I mention it's free and you don't even have to register?

Why is it free? Because buying a car is something almost everyone has to do and I strongly believe the process is designed to confuse and take advantage of consumers. I'd like to level the playing field and give everyone a chance at a fair deal.