A lot of what you hear about auto insurance is hear say and a good bit is also assumption. But quite a few facts are actually accurate.
Urban dwellers pay more insurance: Fact number one is that people who live in urban areas tend to pay more insurance than people who live in more suburban or rural areas. This is attributed to that fact that cities tend to have more people claiming on their insurance policies, simply because there is so much more traffic, people, accidents and crime. In general this will mean higher rates for the urban dweller.
Comprehensive coverage versus collision coverage: Another thing is that comprehensive coverage will only cover natural or no fault disasters such as hail and fire damage. If you have comprehensive coverage, it will cover the costs of damage associated with vandalism, animal, hail or fire accidents. However, if your vehicle bangs into another vehicle, your collision coverage comes into play. A speeding ticket may not necessarily hike your insurance rate but, an accident will. This applies even if you are not at fault. The difference is that accidents that you are responsible for have a direct impact on what you pay, but accidents that you are not responsible for could cause you to be placed by the insurance company in a group of clients who get charged higher rates for careless driving or driving under influence.
Age factor: For the younger crowd, age comes in handy: rates tend to decrease once you turn 25. That's because most current data suggests drivers 25 and older tend to claim on their insurance less frequently.
Grouping clients: If there is a group of clients sharing some characteristic features, an insurance company will most likely group them together. This is just common practice in the industry – since drivers are rated based on the information collected by the insurance companies. This predicts what kind of driver you are going to be. If you lend anyone your car, it's best to remember that once they take the wheel they are covered as long as you have insurance. If the driver does not have insurance and your car is in the center of a collision, you might be held responsible for any damages that might occur. This could make your rates go up.
Auto insurance is expensive and required by most state auto insurance laws. A car insurance protects you from the huge price you may have to pay if you cause damage and injury to another upon collision.
There are 2 different policies at play here: bodily injury liability, and property damage liability. The first kind of insurance protects you from the cost of personal injury to others, and the second insurance protects you from the cost of damage you cause to any physical property. You've probably seen automobile policies described by three numbers (like 80/120/50). These numbers refer to auto liability insurance.
They're usually called the split limits of liability insurance. Your state's car insurance laws will require certain level auto liability insurance. You can easily find your state’s auto insurance laws and the requisite minimums from the website on the Internet.
You may skimp by going with the minimum liability required in your state, but it is always worth investing in a little extra protection.
These will vary from state to state and from one company to another. Do keep these in mind when enquiring about auto insurance policies:
Medical payments insurance: This policy will cover all immediate and on the spot injuries resulting from a car accident that need medical attention. You, your family members and other passengers in your vehicle are covered, irrespective of who is responsible for the accident. Depending on the specifics of the policy, medical payments coverage may also compensate for lost wages or services of a person injured in the car accident. PIP, or personal injury protection, is similar to medical payments coverage, but usually provides broader coverage. Many PIP policies provide compensation for lost wages, funeral expenses, and pain and suffering. Most states that require personals injury protection are "no fault" states, but Maryland, Delaware, and Oregon also do.
Underinsured and Uninsured Motorist Insurance: Both of these types of insurance protect you against injury caused in an automobile accident where the at-fault driver's liability car insurance coverage is inadequate. Though they're often lumped together, they're really two distinct policies.
The Uninsured motorist insurance is needed when the other driver has no liability coverage. The Underinsured motorist coverage pays for the cost of your injuries that exceed the maximum in the other driver's coverage. Most states require neither type of coverage, but some require one or the other, and a few even require both. They're more often required in no fault states.