Car Insurance Tip 4

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.

Car Insurance Tip 3

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.

Car Insurance Tip 2

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.

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.