Car Insurance Quotes and policies explained

The insurer collects information about who you are, where you live, what you drive and how much of the risk you are prepared to cary through the deductible. The rate is then an assessment of how safely you drive and whether you will make a claim.

Insurers collect statistics about all the makes and models. Over time, trends emerge showing some more likely to be involved in accidents where the costs of repair are higher or people are more seriously injured. In part, this will depend on the design of the vehicle, its power and how expensive the spare parts. Equally, some vehicles are easier to steal than others. There are government and national insurance web sites giving league tables on vehicle safety and car insurance rates.

If you insure a vehicle, the general rule is that everyone who drives it with your knowledge and consent is covered. When you live with someone or marry, the usual rule is that everyone in the household may drive a family vehicle so, if one of the drivers has a bad record, this will make it more expensive for everyone. To overcome this problem you should bundle all your car and homeowners insurance together to get the maximum discount. Otherwise, arrange for a named driver to be excluded from the policy. It’s usually cheaper for everyone if the “bad” driver gets his or her own policy.

All but three states have financial responsibility laws requiring you buy a minimum amount of liability insurance. If you borrow money to buy the vehicle, you will also be required to buy comprehensive and collision coverage. After that, you must decide what additional cover represents good value.

Liability insurance pays out to any third party you injure. If you carry collision cover, it pays for your own repairs should you be involved in an accident. Comprehensive covers all the other losses, e.g. should your vehicle be stolen or damaged by a tornado.

Some states have abandoned the idea of liability where the driver at fault pays for all the loss and damage. Instead, everyone carries their own insurance that pays out for their own repairs and medical treatment no matter who was at fault.