Car Insurance Facts -2 : What is covered and What not

These are excerpts from the facts on CAR Insurance in US.

Each person who acquires a driver’s license in the United States is required to 

have at least the minimum coverage required by their state’s laws when it comes

 to general car insurance. This article will outline five of the most common and 

general car insurance facts that you should know about before choosing a policy

 for yourself or someone in your family.

1: Cheap does not mean Ineffective

Believe it or not, a cheap auto policy does not necessarily mean an ineffective policy.

 In fact, some of the cheaper policies offer more coverage than some of the more 

expensive policies. For instance, comprehensive coverage is cheaper than collision coverage, 

but it still offers excellent coverage for the driver.

2: Various Factors Affect Insurance Rates

There are various factors that affect the insurance rate issued to you by an insurance company. 

The factors and guidelines are different from company to company, so be sure you do

 your research before signing up for a policy. 

Some of the factors that go into your insurance rate include previous insurance claims, 

accidents, tickets and even credit history.

3: Prices Vary by Company

Not all drivers realize this but the price of an auto insurance policy will vary

 depending on which company you sign with for that policy. 

The best way for you to acquire low insurance rates is to shop around 

as much as possible. Jeanne Salvatore, the senior vice president of the

 Insurance Information Institute had the following to say about pricing: “Auto insurance

 is a highly competitive business and one of the most effective ways to reduce insurance

 costs is simply to shop around. Drivers should look for an insurance company that will 

provide a good price along with excellent service.”

4: Policy Lapse Means More Payments

Should you let your policy lapse, which means it has expired, you are risking paying 

more money when you restart the policy down the road. To avoid higher insurance 

rates, purchase a new policy from a different company before your current policy expires. 

This keeps your policy from lapsing and you being charged more money than you should be charged.

5: Higher Deductibles Equal Lower Premiums

As with any type of insurance policy, the more you pay for the deductible, 

the lower you will have to pay for your premiums. An auto insurance company 

decides what to charge their customers based on how much they think they will 

have to pay on your claims. If you raise the amount of deductibles you will pay 

when an accident occurs, your premiums will be lower.

Three other general facts regarding car insurance include discounts that can make a 

difference in your policy price, the type of coverage you pick affects what you pay,

 and the car that you own also affects your policy rates.