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Auto Insurance Explained

A new car and new home to insure!

If you own any type of vehicle, then auto insurance is mandatory. Liability insurance is required by law, and Comprehensive and Collision insurance is mandatory if you have the vehicle financed. This is to ensure the lender will get their money should the vehicle be stolen or totaled in an accident. 

There are two types of auto insurance coverage – full coverage and liability. Full coverage auto insurance means that the vehicle is fully covered regardless of who is at fault. This is great in the event that you are the party liable for the accident. It also covers you in the event that the other party doesn’t have coverage, regardless of who is at fault. Liability auto insurance only covers the cost of the other vehicles involved when you are liable for the accident. While full coverage auto insurance costs a little bit more, it does offer you the best protection.

In addition to helping cover the cost of getting your vehicle repaired or replaced, many auto insurance policies assist with the cost of medical bills associated with the vehicle accident. This is very important coverage to have, especially if you don’t happen to have health insurance coverage.

The cost of auto insurance depends on a variety of factors. They include your age, years licensed, your sex, your marital status, your driving record, the type of vehicle you are seeking coverage for, the zip code you live in, the amount of annual miles you drive, and the coverage you wish to have under your auto insurance coverage. You can get better rates on auto insurance by keeping a clean driving record, having young drivers or older drivers participate in a driving class, and combining your policy with another such as a home owner’s insurance policy, or a renter's or condo policy.

You can also get a group discount if you are an accountant, teacher, engineer or scientist, attorney, or are a good student.

It is also a good idea to find out the safety rating on a vehicle before you purchase it. Many people have been upset after buying a sports car to find out the monthly insurance payment is just as high as the vehicle payment itself. Vehicles with additional safety features are generally going to have lower insurance premiums associated with them. 

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