Anyone who has ever owned a car knows that automobile insurance is expensive. A survey conducted by the National Association of Insurance Commissioners found that the average annual premium for each car was $855 (that includes liability, collision, and comprehensive coverage). Understanding auto insurance is the first step towards ensuring that you have the right coverage at the best price.
The cost of your individual coverage depends on many factors -- factors that the insurance company calls Risks. The lower risk you represent to the insurer, the lower your insurance will cost. The cost of your insurance will be impacted significantly by the type of car or truck you buy. A few of the factors that impact your risk include:
Reducing the Cost of Your Auto Insurance
You can often significantly reduce your auto insurance coverage costs by taking advantage of discounts offered by insurers. Discounts are available to drivers who seem like better risks to insurance companies.
Look for the following types of discounts when pricing your insurance needs:
Many features of your auto insurance coverage will be based on your state of residence, but many are the same across state lines. Here are a few coverage options you will have to consider:
In addition to standard coverage, you may want to consider additional coverage called endorsements. Two of the most common are:
When purchasing auto insurance or in reviewing your existing policies, there are some general considerations you will want to be aware of. Make sure the policy provides as much protection as is necessary. Know the maximum dollar amount the insurance company will pay. Be aware of your
deductible amount, which is the amount you must pay before your insurance company will pay anything. Know what your responsibilities are if an accident occurs.
Material discussed is meant for general illustration and/or informational purposes only and it is not to be construed as tax, legal, or investment advice. Although the information has been gathered from sources
believed to be reliable, please note that individual situations can vary therefore, the information should be relied upon when coordinated with individual professional advice.