Car insurance essentials

What is car insurance?

Car insurance is an agreement between you (the customer) and the insurance company that a specific amount of money will be paid to you if a particular car insurance situation takes place while you or anyone listed in the agreement drives the insured vehicle. This agreement comes in the form of an insurance policy that includes all the provisions and exclusions of the present agreement. Car insurance is used to cover costs connected with accidents and liability to third parties caused by these accidents. It also used as a proof of financial abilities to cover any expenses caused by your actions on the road.

Is car insurance mandatory?

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Yes, car insurance is mandatory in most states, and it’s illegal to drive without sufficient coverage. In some states you won’t be able to register your vehicle without providing a valid car insurance policy. In every state there’s a minimum amount of third party liability coverage that a policy must carry in order to be valid, and there are different penalties if the policy doesn’t meet the requirements. In some states you will face a fine while in others you risk having your license suspended or even sent to jail for some time.

Is car insurance uniform?

No. A typical car insurance policy is a bundle of different coverage types, each of which can be modified to various amounts. You are free to include, exclude and modify each coverage type according to your needs, except the third party liability portion (bodily injury and property damage), which is the mandatory part of any auto insurance policy. Depending on how much coverage your policy carries your rates will go up if it’s high and low if you’re cutting your coverage.

How can I get cheap car insurance?

There are different ways of getting competitively priced policies. However, the most effective is shopping around. You can do it by either asking your insurance agent for more quotes or checking car insurance quotes online. The latter is more convenient since you get more information and a wider selection of policies to choose from, and you can compare the quotes for as much as you want from the comfort of your home or workplace, without having to bother your insurance agent. Try getting as many quotes as you can, compare them in detail and choose the policy that meets your insurance needs for the best price.

Car insurance is not such a complicated thing after you learn some basics and essentials. The following frequently asked questions will give you a better understanding of car insurance in general.

There’s much debate about car insurance shopping on the web and people are curious about the advantages they get when they are shopping for car insurance online rather than through traditional means.