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Getting a Car Insurance Quote

Car insurance is a primary requirement for drivers and is often mandated by compulsory state law. For new vehicles or those purchased on credit, generally the financing agency will require the buyer to carry comprehensive auto insurance, as well.

Rates can vary considerably from company to company and across geographic regions, with the lowest monthly premiums not always affording the best value or coverage. Insurers draw upon decades of collected data, developing mathematical probability curves to predict the likelihood of a particular “type” of driver being involved in an accident, and rates are set based upon that statistic.

The principal factors determining each driver’s position on that probability curve, and therefore the cost of coverage, include:

Location. In the United States this is usually the number one factor influencing the premium required to buy a given level of insurance. It can also influence the kind of coverage necessary. For instance, in flood-prone cities insurance against damage from rising water can increase the premium, whereas cities with no record of flooding may not even need such coverage.

Primary driver’s age bracket. This is another fundamental factor, according to the insurance companies’ decades of research. Some younger drivers may lack the experience to correctly evaluate conditions, for example, driving too fast on icy roads or during heavy rainstorms. At the other end of the scale, seniors are more likely to be involved in accidents due to slower reaction times and reduced peripheral vision.

Type of driving most often performed. Is the vehicle regularly driven to work or solely for running errands? Rush-hour traffic on average produces the most accidents, raising the likelihood of any particular driver being involved in one. Impatience is also often heightened during rush-hour, and the increased stress may impair one’s ability to drive safely.

Number of miles driven within a given increment of time. This is related to the type of driving performed. Driving 200 miles a month, just to the grocery store or dropping kids off at school, is less likely to involve an accident than commuting long distances under every imaginable condition.

Amount of deductible. Every car insurance policy will include a deductible, which is the share of costs the policyholder must pay in the event of a claim. As a general rule, the higher the deductible, the lower the monthly premium; the lower the deductible, the higher the premium.

Driving record. Has the primary driver been involved in any accidents or made any claims in the past? This is a major cause of increased premiums.

Multiple vehicle discount. More than one vehicle insured under the same policy may qualify for a reduced premium. In some states and under some conditions, automotive insurance may be bundled into a blanket policy covering a family’s home as well.

There are three major types of car insurance.

Liability. In all states except Wisconsin and New Hampshire, this is required by law for all drivers. Rather than covering the policyholder and her property, liability truck insurance covers damage to other vehicles and injuries to their drivers and passengers, should she be found at fault in an accident. This is the most important coverage of all, as paying someone else’s hospital bills and lost wages, as well as legal representation, can easily bankrupt most Americans.

Collision and comprehensive. These cover the cost of repairing or replacing the policyholder’s car after a collision or, in the case of comprehensive coverage, damage caused by other events such as fire, theft, or vandalism. This is the type of coverage generally required by finance companies for new cars and trucks. As the vehicle loses value over time and use, sometimes the monthly premium can be reduced by lowering the amount of coverage to reflect this depreciation. However, this must be approved by the financing company if the loan isn’t paid off.

Medical. This includes no-fault and Personal Injury Protection, which cover hospital and funeral costs, as well as lost wages, for the policyholder and any passengers following an accident. It’s required in 16 states, but drivers with quality health insurance may not need it.

Extra coverage which can be added includes towing, rental reimbursement, and gap coverage, which pays any outstanding loan amount not covered by the primary policy.

Finally, speedy assistance following an accident or other loss is of prime importance. No one wants to wait weeks or even longer for a claim to be settled, and an insurance company’s reputation for helping its policyholders with solid customer service can be checked through a number of online rating services.