Cheap Car Insurance

Are small cars the cheapest to insure?

Not likely! Small cars can cost more to insure because of who drives them!

There are several factors that insurance companies take into account to determine insurance rates on car models.

• safety equipment (side airbags, alarm, ABS, Stability Control)
• crash test results
• cost to repair
• frequency of claims
• frequency of theft
• typical driver

If you’re looking for cheap car insurance check out the lists below for who is likely to be the car’s driver.

According to the HLDI (Highway Loss Data Institute), for 2004 - 2006 model years the lowest loss cars, and therefore the cheapest to insure, are:

And the highest loss cars are:

As you can see, most of the highest loss cars are small car models.

The lowest loss cars are family-oriented models with moderate performance.

If you drive a car that is popular with young drivers, thieves, or is high-powered, then you will not have cheap car insurance!

Related:

• Tiburon insurance rates and teens

Tags: Cars // 4 Comments »

“I want cheap car insurance but how much coverage do I need to get?”

Most states require a minimum amount of liability coverage. But the legal requirement may not be enough. Collision and injury losses can cost more than the minimum coverage mandated. If you are held responsible for a collision and injury you may have to pay the difference if the costs are more than what the insurance covers. That could ruin you financially.

A common recommendation is that you have bodily injury liability protection of $100,000 per person and $300,000 per accident. This amount should cover most eventualities but keep in mind this is the maximum amount the insurance company will pay out.

If for some reason the losses are higher than that you may be expected to pay the extra, if you have it. Therefore, if your net worth is more than $300,000 you should consider extra liability insurance. You could increase the car insurance policy amount, but check for a less expensive way by getting a separate ‘umbrella’ liability policy. An umbrella liability insurance policy covers other circumstances in addition to car incidents and is cheap: typically $200 - $300 per year for $1,000,000 coverage. It kicks in when your underlying insurance is maxed out. If you buy umbrella liability insurance from the same company as your car and homeowners insurance there may be an additional discount but be sure to shop around for the best buy.

In addition to bodily injury insurance, you may need to buy property damage coverage, meaning damage to your vehicle, other vehicles, and maybe other objects.

Collision property damage coverage pays for the damage to our car. The amount of coverage is determined by the vehicle you drive and the profile of the vehicle’s typical driver. A new Corvette is more expensive to insure than an old Buick Roadmaster because of the cost of parts, the likely way they are driven, and the residual value. The amount of coverage is determined by the insurance company accordingly. If you have a low value car, or one that is seldom used, you could decide to not have collision insurance.

Comprehensive property damage coverage adds protection from damage to your vehicle not occurring in a collision, and some additional features. The amount of coverage is again determined by the insurance company according to the vehicle model.

One choice you do have control of is the deductible. This is the amount you pay before insurance pays. Deductibles are typically $500 - $1500. The higher your deductible the cheaper your car insurance.

Tags: Amounts // 1 Comment »

Car insurance is sold in different packages and combinations. Choose the coverage you need from the available packages that best match your requirements to protect yourself and family.

There are typically two situations in which you want protection:

• You are held liable for injury and damage to property of others.
• You receive injury and damage to your own body and property.

Liability Coverage:

A. Bodily Injury:

Covers other people’s injuries or death for which you are held responsible.
Legal defense against lawsuits.
Other people’s medical bills, loss of income, pain and suffering.
Does not include damage to your vehicle or your family’s injuries.
Is usually mandatory in most states.
Coverage amount refers to per person per incident.

B. Property Damage:

Covers the cost of damage to other people’s property.
Usually it is for the other person’s vehicle, but it can apply to anything you run in to.
Coverage amount refers to maximum per collision.

C. Medical Payments:

Covers expenses for the insured’s medical and funeral services due to bodily injury caused by a collision.
Insured includes yourself, family member, passenger, in your vehicle, and yourself and family member as a pedestrian.
Coverage amount refers to maximum for each person.

D. Uninsured and Underinsured Motorist

UM Property Damage

Applies in an accident caused by a driver without enough liability insurance coverage.

UM Bodily Injury

Covers yourself, family, and passengers for injuries, or death, caused by the negligence of a person with insufficient insurance.

Physical Damage:

E. Collision:

Covers repairs of damage to your vehicle if you hit or are hit by another vehicle.
Choose the highest deductible you can afford to pay out of pocket.
Coverage is normally up to the value of the vehicle, or it is ‘written off’.
Consider not having this for low value cars.
Required for leased or financed vehicles.

F. Comprehensive:

Covers damage, not related to collision, to your own vehicle or other vehicle you may be using. e.g. theft, fire, flood, vandalism, accidents other than collision.
Select as high a deductible as you can afford to pay out of pocket.
Required for leased or financed vehicles.
Unnecessary for low value vehicles.

Other Coverage

G. Transportation Expense

Roadside Service - Covers towing if your vehicle is immobilized.

Rental - Contributes to cost of a rental car while yours is undrivable or being repaired.

H. Personal Injury Protection

Available in certain states to cover policyholder, household members, passengers, other authorized drivers for medical, hospital, and funeral expenses.
Covers injuries to yourself and household members when in another person’s vehicle.
Helpful if you have low or no health insurance, or if you are a passenger in a carpool.

This is a summary of the types of car insurance coverage that are typically referred to in a policy quote. Be sure to read a complete policy document for the details of what is included before signing an agreement.

Keep in mind:

• what coverage you must have legally,
• what you need in order to protect yourself from out-of-pocket expense,
• and what features you can do without, in order to find cheap car insurance.

Tags: Types // 2 Comments »

When you drive a car you realize you take on risk of damage and injury in a collision. Motor vehicle crashes kill over 1.2 million people worldwide each year, and injure about forty times this number (WHO, 2004). The cost of collisions to the U.S. economy is estimated at over $40 billion, even as roads, car design and vehicle controls improve each year.

The losses incurred by an collision can come from a variety of incidents and incur a wide range of expense.

• Property Damage: You can consider taking on the risk and expense of car damage by paying for it yourself. That is, you can ’self-insure’.
  Depending on the value of your vehicle it may be reasonable to decide that you can discard the vehicle completely (’write it off’) or pay for its repairs.
• Bodily Damage: When you sustain injuries the medical expenses can be very high. You may not be able to afford paying for yourself or for your passengers, and health care insurance may not cover everything.
• Liability: Other people’s injuries, damaged vehicles, and private property may be due to your fault and they may sue you for the expenses. These expenses may be way beyond your means to compensate.
• Uninsured: In another situation, you may be involved in an collision through no fault of your own and have to claim expenses from the other driver. If that person is not insured then you may receive nothing or an inadequate amount to cover your costs.

Most states mandate some minimum insurance that you must carry in order to drive legally.

These are the reasons why car insurance is prudent, sensible, and responsible. The cost of maintaining financial protection can be low if you find cheap car insurance rates.

Except for state mandated requirements, you can choose the amount of coverage to carry in order to keep your insurance rates down. By driving carefully and buying easily repaired cars you can get lower rates because you are a lower risk customer.

By carefully choosing the coverage you need, and comparing the quoted rates, you can find your best buy in cheap car insurance.

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When you are looking for cheap car insurance the insurance company will take into account your driving record. If you have had a history of driving infractions such as at-fault accidents, moving violations, driving under the influence (DUI), and even parking tickets, then these will be recorded on your driving record. Many states allocate a certain number of points for each infraction and as they accumulate then the worse your driving record looks.

Car insurance companies often check the motor vehicles department to review a driver’s record but then assess their own point system to reflect your risk as a customer. The number of points determines the premium charged.

Part of this point system includes your credit score. The better your credit history of paying bills, loans, financial stability and the like the lower your insurance risk, and the lower your rates. Before applying for car insurance check the accuracy of your credit score and correct any mistakes.

When you apply for insurance and want to get cheap rates the company wants to determine if you meet their standards to be insured at all, and also to determine how likely you are to have a claim.

Be careful to include all your driving citations and violations in your application. Anything left out could be treated as fraud.

Your rates will vary according to your risk potential. In order to obtain cheap car insurance, obviously you are better off with a clean driving record. Remember that when you are driving - it will affect your insurance costs for a long time!

Insurance companies vary in how they assess risk and how they evaluate applicants. Different companies use your driving record in different ways to assess your rates. When searching for cheap car insurance be sure to check around with as many companies as you can in order to get the lowest quotes.

A risk assessment occurs not only when you are insuring your first car but at any time when you change vehicles, change the amount of coverage, renew your policy, make a claim, or any time when the insurance company decides to audit and review its policy holders. This can vary by state and it may be likely that companies seldom review driving records.

In order to keep your car insurance as cheap as possible be sure to drive carefully to avoid accidents and violations. If you feel you get rated unfairly, check that your driving record has been recorded correctly and, again, shop around for your best buy in cheap car insurance.

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