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Why should you make sure your car is insured?

You may not plan to have a car accident or have your car stolen, but it happens.

From minor fender benders to major crashes ... auto accidents happen every hour of the day. Cars disappear from mall parking lots and from driveways. Repairing or replacing your vehicle and covering medical costs can be financially devastating.

Having insurance on your car is not just smart. Most areas require the owner of a vehicle to carry a minimum amount of car insurance. Driving an uninsured vehicle can get your license revoked or worse.

Car Insurance Rates

There actually are some simple, painless ways to lower your car insurance. First, you need to know what your rates are based on.

What you pay for your car insurance depends on many factors. Insurance companies keep records for different groups and compare the accident rates in these groups. Young male drivers tend to have more accidents than other drivers and the insurance companies charge them more for insurance. If your household includes a young man of driving age, your insurance will go up to cover him... even if he doesn't drive your car!

Many insurers are now giving reductions in premiums to young adults who have completed driver's education courses because that group, statistically, has less accidents than others in the same age group.

Besides your age and sex, insurers may look at other personal information, including your credit rating; how many years you have been driving, your accident record, moving violations on your license, how much you drive and what you use your car for; your marital status — married drivers tend to have fewer accidents; the accident rates and reports of stolen cars in your community; your driving record; whether you have a current auto insurance policy; the value of your car; how much coverage you choose and how big a deductible you are willing to pay.

According to a September 2007 report from the National Association of Insurance Commissioners (NAIC) in the USA, where rates tend to vary from state to state, New Jersey had the highest average cost ($1,184), followed by the District of Columbia ($1,182), New York ($1,122) Massachusetts ($1,113). Compare these auto insurance rates to Louisiana, where the average hovers around $1,076.

Finding Affordable Car Insurance

Generally, the higher the coverage ( the money the insurance company will have to pay if your car is stolen or you are in an accident) — and the lower the deductible (the amount of cash you will have to personally cover for repairs or medical costs) — determines how expensive your insurance payments will be.

Be careful, and make sure that you don't fall below the coverage you need. Comparing cheaper auto insurance rates can merely result in less insurance.

A policy that has too high a deductible or really low coverage limits can cost you more if you wind up needing to use it. Ask your agent about the minimums you should have, and carefully follow those guidelines.

Driving a brand new sports car will cost more for insurance than an older sedan. Some insurers even take the color of your car into account. Red sports car are more likely to be involved in accidents than less flamboyant colors. Honda Accords were popular in 2009 as one of the most stolen by car thieves. For updated reports on the most popular stolen vehicles, check the National Insurance Crime Bureau.

So if you're in the market for a new car, check the insurance rates before you decide what to buy. In some instances, insurance premiums can cost more than car payments!

Taking a driver's education or safe driving course will normally lower your premiums, especially if you are a male under 25 years old. Installing special locks to prevent theft and safety features to reduce personal injury in an accident can also make a dent in what you pay for car insurance. Car poolers and older drivers often qualify for low mileage rate reductions. When you are researching the costs of different policies, ask about what reductions each company offers and make sure they are included in your quote if they apply to you.

Shop Around, Compare Rates, Shop Around Again

There are plenty of places online where you compare insurance quotes with no obligation to buy. Try at least three or four different ones to see what the price range should be. Make sure you can add in any rate reductions you qualify for.

If you don't have the time to shop online or make calls to different companies, get a professional insurance agent do it for you. In some instances, the difference between car insurance policies can be more than US$1000 a year for the exact same coverage.

High Risk Pools

In the USA, if you are a new driver, live in a high risk area or have a poor driving record, you may be assigned to a "high risk pool." In this system, every auto insurer in your area must accept the motorists assigned to it. The good side of this is that no one can be denied insurance. On the other hand, premiums are substantially higher under assigned risk pools than directly with a private insurance company. You cannot "shop around" if you are assigned to an insurance company through a high risk pool.

Another option, if you have been told that you are assigned to a "high risk" pool, is to find an insurance company in your area that sells specialized "non-standard" insurance. While these policies are more expensive than lower risk car insurance, they often provide better coverage for a lower price than you will get from the assigned high risk insurance.

To find out more details on the assigned risk pool or "non-standard" policies in your community, ask your insurance agent or your local government insurance department.

also see -> Five Great Reasons to Compare Auto Insurance

Save Money on Your Auto Insurance Payments

More about auto insurance around the Web:

Auto Insurance Basics - A complete online library of articles including scams to watch for, how to lower your rates, how to switch auto insurance companies, and related topics.

Vehicle insurance - Wikipedia - Very general info on car insurance covering many countries.

Insurance-Canada.ca ConsumerInfo on Auto Insurance - General info plus news articles, safety information and tips and articles from consumers. Click to find quotes by Province.

Guidelines For Filing A Car Insurance Claim - Tips and facts on what to do and the information to gather if you need to file an auto insurance claim after an accident.

Insurance Information Institute - Auto Insurance - Check out a full list of consumer articles covering the basics including typical prices, money saving tips, plus related industry stats.

Buying a Car Insurance in Australia - Each State and Territory has specific regulations on motor vehicle insurance. This site provides links to all of the info you'll need.

also see related articles -> Put More Muscle in Collectible Car Insurance

also see -> Home Legal Guide - Auto Accidents | Buying a Car