Best Car Insurance Tips

How much you pay for Car insurance depends o­n several factors, including your age and marital status, where you live, and what you drive. You can't do anything about your age, and few people will move just to lower their insurance premium. You can, however, choose a vehicle that costs less to insure.
In this article, we'll give you all of the helpful tips you need when getting car insurance.

Know Your Coverage Types

What is your car insurance actually insuring? Although you're buying a single insurance policy covering a specific vehicle, a number of components make up the final cost:

• Bodily injury liability: Covers injury and death claims against you, and legal costs, if your car injures or kills someone.
• Property damage liability: Covers claims for property that your car damages in an accident. Because liability coverage protects the other party, it is required in all but three states.
• Medical payments: Pays for injuries to yourself and to occupants of your car. This is optional in some states. In "no-fault" states, personal injury protection replaces medical payments as part of the basic coverage.
• Uninsured motorist protection: Covers injuries caused to you or the occupants of your car by uninsured or hit-and-run drivers. "Under-insured" coverage also is available, to cover claims you may make against a driver who has inadequate insurance. In some states, as many as 30 percent of drivers are uninsured.
• Collision coverage: Covers damage to your car up to its book value. Collision coverage carries a deductible, which is the amount per claim you have to pay before the insurance takes effect. The lower the deductible, the higher the premium. While it is legally optional, a lending institution or leasing company usually requires collision coverage.
• Comprehensive (physical damage): Covers damage to your car from theft, vandalism, fire, wind, flood, and other non-accident causes. Comprehensive also carries a deductible.

Your Vehicle Affects Your Premium
Y­ou might want a sports car or a fancy SUV, but your insurance company may charge you more to protect you while driving it.

Insurance premiums are based partly on the price of the vehicle, which affects the replacement cost if it is stolen or "totaled" in an accident. How expensive the vehicle is to repair -- including parts and labor -- can also affect the cost. In addition, surcharges may apply to vehicles that are frequently stolen or involved in accidents.

Industry-wide information on injury claims, collision repair costs, and theft rates by vehicle model is available from the Highway Loss Data Institute (HLDI). You can write them at 1005 North Glebe Road, Arlington, VA 22201. HLDI is affiliated with the Insurance Institute for Highway Safety (IIHS).

According to HLDI, the lowest injury claims are from large vehicles -- cars, pickup trucks, and sport-utility vehicles. Small 2- and 4-door cars have the highest injury claims. Small cars also are among the highest in collision costs, along with sports cars.

If you have your heart set on a sporty vehicle, you'll probably pay dearly. Insuring a high-performance car can easily cost two or three times the insurance amount for an ordinary model.

Sport-utility vehicles, the hottest market segment, often have higher insurance rates than mid- and full-size cars, but some SUV models are relatively cheap to insure. SUVs are "hot" for other reasons: They are among the most frequently stolen vehicles, and they are more expensive than most cars. Cadillac's Escalade is currently the most popular model sought by thieves, but it's followed by the Nissan Maxima sedan. SUVs also can cost more to fix after an accident if the 4-wheel-drive system is damaged.

However, insurance companies set rates based on their own experience. If Company A has more collision and theft claims for a particular vehicle than Company B, then A will charge more for the same coverage. It all boils down to a company's actual experience with a particular vehicle or category of drivers. That is why it pays to shop around for insurance.


Who You Are Affects Your Premium

Factors that you can least control may have the greatest impact on your insurance costs. Your age, gender, and driving record are key factors that affect your insurance premium.

Single males under the age of 25 pay the highest rates. Statistics show they are involved in the most accidents, so insurance companies charge young men higher premiums than women of the same age. Married men, who statistically have fewer accidents, pay less than single men. A handful of states do not allow rates based on sex or age, but that prohibition has tended to result in higher rates for women, not lower rates for men.

If you are convicted of moving traffic violations or of causing an accident, your premiums will likely go up, no matter what your age. Drivers with clean records -- no tickets, no accidents -- pay the lowest rates.
Where you live also plays a big role in how much you pay. Urban areas, with their greater population densities and heavier traffic, get higher rates than rural areas.

According to the Insurance Information Institute, the average insurance expenditure in mainly urban New Jersey -- traditionally the most expensive state -- in 2002 was more than double that of North Dakota, a rural state with the lowest average premiums. High costs in states such as Florida, Massachusetts and New York are attributed to growth in fraud and theft.
In most states, too, insurers set rates by zip codes. If you live in a major city like Chicago or Los Angeles, you will probably pay more than if you lived in a nearby suburb.  

Decide How Much Coverage You Need
While it is dangerous to be underinsured, having too much insurance can be an expensive mistake as well. Without insurance, your property is put at risk in an accident that is your fault. The minimum amount of insurance required in your state is seldom enough.

State law may require as little liability coverage as $15,000 per person, $30,000 per accident, and $5000 property damage. About half of the states require $25,000 per person and $50,000 per accident. Half of them require $10,000 in property damage coverage. If you can afford it, buy more than the minimum. After all, $10,000 for property damage may not be enough if you hit a $100,000 Mercedes-Benz.

The more assets and income you have, the more insurance you need. Most insurers recommend liability coverage of at least $100,000 per person, $300,000 per accident, and $50,000 property damage if you have assets to protect, such as a house. Some insurers also recommend a $1 million "personal liability umbrella" policy issued in conjunction with homeowner's coverage. State Farm reports that such coverage averages $270 a year, but the amount varies significantly depending on location and other factors. An "umbrella" policy could protect a family from financial ruin in a major lawsuit.

Like buying a car, there is no single best solution when it comes to buying insurance. Rates vary widely. Surveys suggest that you could pay anywhere from $500 to $2000 annually for the same coverage from different companies. Shop for insurance by consulting two or three of the largest insurers, such as State Farm and Allstate. Then, contact one or two independent agents who can quote premiums from more than one company. In addition, there are direct-marketing companies, such as GEICO and Progressive, which do business over the phone rather than through agents and offer some of the lowest rates. Ask for an itemized list of coverages and costs.

"We're price-competitive," said spokesperson Dick Luedke of State Farm, whose rates dropped somewhat during 2004. But with so many factors involved in setting rates, it's wise to check several prospects.
In 2004, the average price of auto insurance nationwide was $871, according to the Insurance Information Institute. They expected that the cost of auto insurance would rise by 3.5 percent in 2004, which would be the smallest increase in four years.

Don't forget the Internet. Many companies now offer online quotes, and insurance shopping on the Web allows you to compare rates from multiple providers in the comfort of your own home.

You Can Reduce Your Premiums
The biggest difference you can make is to buy a vehicle that qualifies for a discount or at least doesn't carry a surcharge. Ask your insurance agent about the cost of insuring vehicles you are interested in before you make your purchase decision. Here are several other ways that you can save money on your car insurance:

• Most companies give a break to those who drive less than 7500 miles a year. If you take public transportation instead of driving to work, your premium will go down. Out of the question? Try carpooling.
• Make sure you get all the discounts you are entitled to. You might qualify if your vehicle has an alarm, for example. Discounts used to be given for such safety features as airbags, but they're fading away as those items become more commonplace. Discounts might also be available if you insure your vehicles and your home with the same company. People who pass a defensive-driving course or don't smoke or drink often get discounts.
• Review the status of all the drivers in your family with your agent. Most discounts apply only to one portion of the policy, so don't expect dramatic savings.
• Increase your deductible for collision and comprehensive. Switching from a $100 deductible to $1000 can reduce the collision portion of your premium by 30 percent, said Luedke. You'll still be covered for catastrophes, but you foot the bill for fender-benders. Also, think twice about filing small claims with your insurance: Why risk a premium increase?
• Shop around. Instead of just renewing, study the fine print of your policy to see if its terms -- or your situation -- have changed. Another company might have better rates, but you won't know unless you shop. Most insurers give rates over the phone and many via online computer services, making it easy to compare premiums.
• Drop collision coverage on older cars. Claims are limited to "book" value, so you're not likely to get much anyway if you car is more than seven years old. A good rule of thumb is to drop collision when the annual premium reaches 10 percent of your car's value.
• Be a good driver. Avoid accidents and traffic violations and you will be rewarded with good-driver discounts. Bad driving is expensive. The "safer you can be" on the road, Luedke said, "the lower your premiums."
• Drop coverage for such extras as towing costs or the expense of renting a car while yours is in the shop. The savings are probably small, but your new-car warranty's roadside assistance provision may provide them at no cost.
• Have your teenager share the family car instead of owning his or her own. Be sure to tell your agent if your son or daughter makes the honor roll or moves away to college. Both qualify for discounts with most companies.
• If your group health insurance provides generous coverage, consider dropping the medical-payments portion of your policy.
• Keep your credit rating healthy. A growing number of insurers are considering a person's credit score when setting rates.

Now, you know tips before buying car insurance, good luck!

Src : http://auto.howstuffworks.com/buying-selling/cg-car-insurance-tips.htm

10 Thing About Commercial Auto Market Should Know

The Following are 10 Thing About Commercial Auto Market Should Know :

1. The commercial auto segment saw an underwriting loss in 2011 for the first time in nine years, with a combined ratio of 103.6 percent, according to a special report on the U.S. commercial auto insurance industry published by Fitch Ratings in October 2012.
2. A commercial driver study by LexisNexis Risk Solutions found employers tripled their employment verifications of commercial drivers during the first half of 2012.
3. 16,000 brand new vehicles were scrapped because of Superstorm Sandy (Reuters)
4. False or unverifiable driver history rose nine percentage points from 2008 to 2012, topping 2012 at 38.97 percent, according to the LexisNexis Risk Solutions Commercial Driver Study.
5. Commercial auto is the third-largest commercial lines segment, with 9.8 percent of commercial lines premiums in 2011 (Insurance Information Institute).
6. Commercial auto net premiums written in 2011 totaled $21.04 billion and direct premiums written totaled $23.5 billion. (SNL Financial LC)
7. Travelers Group had the most market share of the commercial auto market in 2011, with 8.41 percent and $2.02 billion in direct premiums written, according to the National Association of Insurance Commissioners (NAIC).
8. Liberty Mutual had the second-highest market share in 2011 (6.56 percent), with $1.57 billion in direct premiums written (NAIC).
9. Commercial auto rates rose 5 percent in November 2012, compared with November 2011, and were up 6 percent in December 2012, compared with December 2011 (MarketScout).
10. Travelers’ 2012 third-quarter earnings report cited its commercial auto rates rose 9 percentage points.

Src : http://www.mynewmarkets.com/articles/181526/10-things-to-know-about-the-commercial-auto-market

Common Misconceptions About Car Insurance

Know what you have before you need it: a quick review of your car insurance policy will remind you what's covered, and what's not.

It's easy to make assumptions about auto insurance, and it's even easier to forget certain details about your own unique coverage.

A quick review of your auto insurance policy can easily shed some light on things. Start with the Policy Declarations, which contains the details of what's covered by your policy.

Below are some of the most common misconceptions about auto insurance and helpful guidance on those issues.

I Thought I Had "Full Coverage."
Many people believe that an auto insurance policy automatically includes things like Comprehensive Coverage, a low deductible, coverage for possessions stored or transported in your car, protection against theft or damage of special custom add-ons, or even automatic rental car reimbursement after an accident.

In truth, these are options that you typically must specifically choose, and purchase, for your auto insurance policy. (In some cases, state laws dictate what kind of coverage options an insurance company is allowed, or not allowed, to offer its customers. Therefore, the laws in your state could affect the kind of insurance coverage you’ll be able to purchase.)

I Thought I Had Rental Car Reimbursement.

If you've been in an accident and your car is not drivable, you'll most likely need a rental car. It's easy to assume that an auto policy automatically covers the cost of renting a temporary replacement car.

However, this, too, is an option. Rental car reimbursement coverage must be specifically requested and purchased when you buy your policy. Talk with your agent or review your policy for more details to see if you are covered.

I Wasn't Driving My Car When It Was Damaged. Why am I Being Held Responsible?

If you lend your car to a friend who happens to then get into an accident, it might seem easy to assume that your friend will be responsible for the damage. In truth, however, auto insurance is designed to protect you, your assets, and your car. Auto insurance is designed to help protect you in situations that involve your vehicle. Which is one of the reasons that auto coverage follows the car.

That means that if the covered car is damaged or involved in an accident, no matter who's driving, the policy attached to the car - not the person driving it - will be expected to cover the loss. That's as long as the person driving had verbal or written permission to do so.

 Source : http://www.allstate.com/auto-insurance/common-auto-insurance-misconceptions.aspx#fullcov

Tips to Buying Auto Insurance

When it comes to auto insurance, you want to be adequately covered if you get in an accident, but you don't want to pay more than you have to. Unfortunately many people are doing just that, simply because they don't want to spend time shopping for car insurance. It's not inherently enjoyable, after all, despite how it looks in commercials featuring disgruntled cavemen and joke-cracking spokespeople.

But by doing some comparison shopping, you could save hundreds of dollars a year. When one of our editors used a rate-comparison service, he got basic coverage quotes for his two old cars that ranged from $1,006 to $1,807 — a difference of $801 a year. If you're paying thousands to your current insurance company because you have a couple tickets, an accident or an out-of-date and unfavorable credit rating, shopping your policy against others might be well worth the effort. Look at it this way: You can convert the money you save into buying something you've wanted or needed for a long time.

Step 1: Decide How Much Coverage You Need
To find the right auto insurance, start by figuring out the amount of coverage you need. This varies from state to state, so take a moment to find out what coverage is required where you live. You will find a list of each state's requirements and an explanation of the various types of insurance in "How Much Car Insurance Do You Need?" Also, check out "Little-Known but Important Car Insurance Issues," which has a glossary of basic insurance terminology. If you're a first-time driver and need a comprehensive overview of car insurance before you go on, review this guide from the National Association of Insurance Commissioners. Now you're ready to make a list of the different types of coverage you are considering.

Once you know what's required, you can decide what you need. Some people are quite cautious. They base their lives on worst-case scenarios and insurance companies love that. Insurance companies are in the risk business, and they know a policyholder's likelihood of being in an accident, as well as how likely it is for a car to be damaged or stolen. The insurance company crunches the information it has collected over decades into actuarial tables that give adjustors a quick look at the probability of just about any occurrence. You don't have those tools at your disposal, so your decision will depend on your own degree of comfort in assuming a certain level of risk.

Experts recommend that if you have a lot of assets, you should get enough liability coverage to protect them. Let's say you have $50,000 of bodily injury liability coverage but $100,000 in personal assets. If you're at fault in an accident, attorneys for the other party could go after you for the $50,000 in medical bills that aren't covered by your policy.

General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (usually expressed in insurance shorthand as 50/100/25). Here again, let your financial situation be your guide. If you have no assets that an attorney can seek, don't buy coverage unnecessarily.

Your driving habits might also be a consideration in determining the coverage you need. If your past is filled with crumpled fenders, or if you have a lead foot, or if you make a long commute on a treacherous winding road every day, then you should get more complete coverage. Collision coverage pays for damage that your car experiences in an accident or damage from hitting an inanimate object (a tree, light post or fence, for example). Comprehensive coverage addresses damage that didn't occur in a collision — such as from fire, theft or flood. It also covers damaged windshields.

Keep in mind that you don't have to buy collision and comprehensive coverage. Let's say your vehicle is older, you have a good driving record and there is little likelihood that your car would be totaled in an accident, but a high likelihood of it being stolen. Then you could buy comprehensive coverage and skip the collision insurance.

Step 2: Review Your Current Insurance Policy
Read through your current policy or contact your auto insurance company to get the information you need. Jot down the amount of coverage you have now and how much you are paying for it. Take note of the yearly and monthly cost of your insurance, since many of your quotes will be given both ways. Now you have a figure to beat.

Step 3: Check Your Driving Record
You should know how many tickets you have had recently. If you can't remember how long that speeding ticket has been on your record, check with your state's department of motor vehicles. If a ticket or points you earned are about to disappear, thus improving your driving record, wait until that happens before you get quotes. Nothing drives up the price of insurance like a bad driving record.

Step 4: Solicit Competitive Quotes
Now it's time to start shopping. Set aside at least an hour for this task. Have at hand your current insurance policy, your driver license number and your vehicle registration. You can begin with online services. If you go to an online site to get a quote for an insurance rate, you can type in your information and begin to build a list of companies for comparative quotes. Keep in mind that not all insurance companies participate in these one-stop-shopping sites, however. If a recommendation from friends and family or other research points to a company that you think might be a winner, you can go directly to its Web site or call its toll-free number to get a quote.

Each quote form takes about 15 minutes each to complete. It might be well worth your time, since if the entire shopping process takes you two hours and you save $800, you're effectively earning $400 an hour.
When you use these sites, you might not get instant quotes. Some companies may contact you later by e-mail. Some that are not "direct providers" might put you in touch with a local agent, who will then calculate a quote for you. (A direct provider like Geico sells insurance policies directly to consumers. Other companies, such as State Farm, sell insurance through local agents.) You can learn more about the various kinds of agents here.

Step 5: Gather Quotes and Company Information
While you're researching companies, take careful notes so you can easily make price and coverage comparisons. Keep a list of:

• Annual and monthly rates for the different types of coverage. Make sure to keep the coverage limits the same so you can make apples-to-apples comparisons for cost and coverage.
• The insurance company's 800 telephone number, so you can get answers to questions you couldn't find online.
• The insurance company's payment policy. When is the payment due? What kinds of payment plans are available? What happens if you're late in making a payment?

Step 6: Work the Phones
Once you have gathered information online, it's time to work the phones. Contact those companies from which you haven't been able to get an online quote. Doing the research by phone can actually be easier and faster than on the Internet, provided you have your driver license and vehicle registration close at hand. When you get a quote over the phone, be sure to confirm the price by asking the representative to e-mail the quote to you.

Step 7: Look for Discounts
When you're making these calls and shopping online, make sure you explore all your options relating to discounts. Insurance companies give discounts for such things as a good driving record, your car's safety or security equipment and certain occupations or professional affiliations. Some companies are now offering lower rates if you enroll in "pay as you drive" plans. Some will give substantial discounts for young drivers in the family who have high grade-point averages. (You can use this as an incentive to your teen drivers and offer to share the savings with them.) Also consider using the same insurance company for home and auto policies. That will usually get you a better price. For more guidance on discounts, check out "How to Save Money on Car Insurance" and "Top 10 Ways To Lower Your Car Insurance Bill."

Step 8: Assess the Insurance Company's Track Record
You now have most of the price and coverage information that you need to make a decision. You can see which company's coverage is least expensive, but it's important to keep in mind that cheap isn't the only basis for choosing an insurer. How do you know which company is financially sound? How do you find out if an insurance company is going to treat you right — particularly in the event of a claim?
Here are some places to check to develop a clearer picture of an insurance company's track record for fairness, financial stability and customer service.
1. Use the National Association of Insurance Commissioners' Consumer Information Source to access information about insurance companies, including closed insurance complaints, licensing information and key financial data. You also can visit your state's department of insurance to check consumer complaint ratios and basic rate comparison surveys.
2. Consider contacting an independent insurance agent for additional information about a company.
3. Check out the financial strength ratings for an insurance company by referring to the ratings from A.M. Best and Standard & Poor's (registration may be required).
4. Review consumer satisfaction surveys from J.D. Power and Consumer Reports (subscription required).
5. Ask friends and family about their insurers and whether they're satisfied with them. In particular, ask them how their insurance companies treated them if they had a claim. Did they get fair, straightforward service? Or was it a hassle to get the matter resolved?

Step 9: Review the Policy Before You Sign
When you're done your research and zeroed in on a company, read over the main points of the policy. In addition to verifying that it contains the coverage you've requested and priced, it's a good idea to find out if the policy states that "new factory," "like kind and quality" or "aftermarket parts" may be used for body shop repairs, says Dennis Howard, director of the Insurance Consumer Advocate Network. If the policy has such a requirement, think hard about whether this is the company for you, particularly if you own a relatively new car that you plan to keep for a while. In this case, it's best to know at the outset that the insurer will pay for original manufacturer parts, rather than try to fight later, when you have a claim.

Step 10: Cancel Your Old Policy; Carry Your Proof
After you have secured the auto insurance policy you want, cancel coverage with your existing insurance company. If your state requires you to carry proof of insurance, make sure you put the card in your wallet or the glove compartment of your car.
Finally, here's a quick checklist to keep you on track:

• Determine your state's minimum insurance requirements.
• Consider your own financial situation in relation to the required insurance and consider whether you need to increase your limits to protect your assets.
• Review the status of your driving record — do you have any outstanding tickets or points on your driver license?
• Check your current coverage to find out how much you are paying.
• Get competing quotes from Internet insurance Web sites and individual companies of interest to you.
• Make follow-up phone calls to insurance companies to get additional information about coverage.
• Inquire about discounts.
• Evaluate the reliability of the insurance companies you're considering by visiting your state's insurance department Web site, reviewing consumer surveys and talking to family and friends.
• Review the policy before finalizing it. Remember to cancel your old policy.

That's all tips to buying auto insurance, good luck!

Reference : http://www.edmunds.com/auto-insurance/10-steps-to-buying-auto-insurance.html

10 Items You Need When You Make A Claim of Auto Insurance

Do you have problem when make auto insurance claim, or your claim was rejected? What do you need when you make auto insurance claims ? Here are top 10 items to make auto insurance claim

1. Take pictures of the accident right after it occurred.
Take a photo of your vehicle and the other vehicle(s) involved including all 4 corners. Also, if you can get the other party in the photo, that will help in the event that either insurance company needs help identifying the other party involved.

2. Write down all the information.
Record all the information that you have gathered and keep it in a safe place. This is to assist you if there is a problem with the claim. When you report it, be sure to write down who you spoke with, your claim #, and what if any promises were made. This will make your life easier if someone says something and then it doesn’t happen.


3. Were the police called?
If the police called or showed up, make sure to get the name and badge # of the officer and a report number. It may take your insurance company up to 3 months to get a police report, so be sure you take the information but don’t rely on the insurance company getting the information.

4. What kind of vehicle or vehicles were involved in this accident?
You want to make sure that you get the vehicle year, make and model, the license plate #, and VIN number for each vehicle involved.

5. Where did this happen?
Get the intersection or street that the accident happened on. Also, you want to make sure that you know how many lanes are on each side of the street, if the street or streets are 1 way or 2 way, the type of striping on the pavement within 100 feet each direction of the loss, i.e. is it a solid, double yellow line, a white line, etc. Also, you want to know where each vehicle impacted, what lane you and the other car were driving in just before the accident, the direction of travel for each vehicle, and if there were any signs posted that control traffic flow.

6. How many passengers were in each vehicle?
Take note of how many people were in each of the vehicles involved. Once you know, make a brief note of their description or name including: ethnicity, gender, weight, height, etc. This will help if you are the victim of a staged accident or other type of insurance fraud since people sometimes mysteriously are reported as an occupant of the vehicle when they were not present. This is not common, but if it ever does happen, this will help you avoid being a victim.

7. What type of condition was the car in right after the accident?
Was the vehicle drivable? Where is the damage? Is there any additional damage on the vehicle not related to the accident? If there is additional damage on the vehicle not related to this accident, be sure to tell your insurance company.

8. Where do I want to get my vehicle repaired?
 If you have a shop in mind, have that information with you. If you don’t, ask around, your friends might have a good recommendation. Otherwise, you can ask your insurance company if they have a repair program. If they do have one, be sure to ask about the program’s warranty, cost, and if there is a benefit to using it.


9. Were there any witnesses?
Was there anyone who saw the accident happen? You want to make sure that you get information from anyone who saw the accident. This will assist the insurance companies to determine who is liable for the accident.

10. Who did I have an accident with?
Be sure to get complete information from the other party(ies) involved. This means copying down their address, driver’s license #, date of birth, and ask for their phone number.  In addition, obtain their insurance information including, the company, policy #, agent if there is one, the policy begin and expiration date and their phone #. You need to make sure that you have as much info as possible to give your insurance company; this will help get your claim resolved as fast as possible.

If you have a claim that needs to be filed, the above items are good to gather since it will make the process easier and assist your insurance adjuster to resolve your claim at a faster pace. The insurance adjuster(s) you will deal with each have a job, it is to resolve as many claims as they can in the least amount of time possible. As a result, the more information you can give him or her, the smoother the process will be.

If there is less or more important than the above items, please comment !

Reference : http://www.autoinsurancetips.com/auto-insurance-claims-top-10-items-you-need-when-you-make-claim

What is Auto Insurance?

Auto Insurance also called Car Insurance, Vehicle Insurance, Motor Insurance, or GAP insurance.
Auto Insurance is insurance purchased for road vehicles such as cars, trucks, motorcycles, and other. The function of this insurance is to provide financial protection against physical damage and/or bodily injury resulting from traffic collisions and against liability that could also arise therefrom.

The specific terms of auto insurance vary with legal regulations in each region. To a lesser degree auto insurance may additionally offer financial protection against theft of the vehicle and possibly damage to the vehicle, sustained from things other than traffic collisions.

If your vehicle struck down by a falling tree, stolen by a crook or totaled by a distracted driver, Do you have enough savings to repair or replace it?

Fortune, having car insurance means you don’t need a massive savings account to repair or get new car. auto insurance gives you protection against six types of risk and potential financial losses:

• Bodily injury: Pays when you hurt someone in an accident or get sued for the victim’s injuries.
• Collision: Will pays for damage to your car (minus your deductible) when you get into an accident, even if it’s your fault.
• Comprehensive: Pays for damage to your car (less your deductible) caused by something other than a collision, such as fire, vandalism or a falling tree.
• Property damage: Will pays for damage you do to someone else’s property, like damaging that person’s car or destroying that person’s fence or landscaping.
• Personal injury protection (PIP): Pays when you or your passengers are hurt in an auto accident and may cover lost wages, medical bills and funeral expenses.

States and lenders have different requirements for the types of auto coverage and minimum amounts you have to buy. For instance, Texas requires drivers to carry insurance that pays at least $60,000 for injuries and $25,000 for property damage per accident.

However, if your financial damages exceed your car insurance coverage, you could be sued for the difference. So always make sure you have enough auto insurance coverage to protect your assets.

How much will car insurance cost?

When you purchase car insurance, the amount you’re charged (the premium) varies reckoning on factors such as your age, vehicle make and model, driving record and credit score.

Yes, that means if you’re young, have been in a few fender-benders or have poor credit, insurers may consider you more risky and charge you more than average drivers in your area.

The vehicle you choose to drive also determines the cost of your auto insurance. It probably won’t surprise you that family mini-vans cause fewer losses for insurers than fast, sporty cars. (Read “The 15 cheapest vehicles to insure” to learn more about cars and trucks with low insurance costs.)

Another important factor that insurers consider is where you live. For 2010, the average auto insurance premium in Washington, D.C., was $1,134. But in North Dakota it was only $529, according to the National Association of Insurance Commissioners.

The good news is that many insurers offer discounts.