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Overview
Most responsible adults know that an important part of being a vehicle owner is making sure that you have that vehicle insured. Not only will you be covered in case of an auto collision, but you also ensure that if the accident is your fault, the other person will be compensated for injuries and damage. Shopping around for insurance can be a chore, but if you take the time to make comparisons, you might be surprised at how much money you can actually save.
How Much Does it Cost?
The average single American adult will pay about $900 per year, or $75 per month, on car insurance. Some states' premiums are higher because of DUI rates in the state or an excess amount of claims, so you may pay up to $1,300 per year in those cases. There is no common rate, however. Before writing up a policy, or even giving you a quote, insurance companies take a lot of different factors into consideration before they can determine how much you will pay. For example, your rates are largely dependent on your age. If you are under the age of 25, your rates will be higher. In addition, the type of car you drive also plays a role. If you own a sports car, your rates will be higher than those of someone who owns a four-door sedan.
Significance
Most companies offer competitive auto insurance rates. Sometimes if you get a quote from one agency and take it to another agency, they can match the price but offer slightly, and sometimes much, better coverage. If you are leasing or financing your car, you will need to have full-coverage insurance, whereas you can usually get away with just liability, if you own your car.
Types
The minimum insurance requirements vary by state. For example, New York State requires that drivers carry Bodily Injury Liability, among other types of insurance. However, there is a limit of $25,000 per person injured on the Bodily Injury Liability. In addition, most insurance policies will pay up to $50,000 per accident for this type of coverage. There is a $10,000 limit put on Property Damage Liability; a $50,000 limit put on Personal Injury Protection; and a $25,000 or $50,000 limit on Under-insured/Uninsured Motorist Bodily Injury. The limits on your coverage will also vary according to which state you live in.
Considerations
Though premiums may start out high, there is always the possibility that the premiums can go down. If you maintain a good driving record and do not get into any collisions, it is possible that in time, your insurance rates will decrease. Also, if you are considered a high risk driver because of too many traffic tickets or because you are under the age of 25, you will most likely pay higher premiums, as well. Also take into consideration the fact that your rates will increase if you get married. Adding someone to your policy will undoubtedly end up in you paying more per year. In addition, those same factors that applied to you during the application process will also apply to the new driver in the household, so if he or she is a high risk driver, expect your rates to spike.
Potential
Shop around for the best insurance rate that you can get. Even if you are a high risk driver or you are under the age of 25, there is always the possibility that one agency might offer you a better price than another agency. Sometimes drivers will simply settle on buying insurance from the company that will insure them, but most of the time, they end up getting a raw deal in the form of high premiums.
