First Car Guide for First Time Car Buyers

You may go through your entire life and never have a car accident. But the odds are against you. Auto insurance protects you from potentially disasterous costs of such accidents. 

Types of insurance
An auto insurance policy might include one or more of the following types of coverage:

• Liability - Protection from costs associated with personal injury and property damage you cause in an accident. Legal actions against at-fault drivers is becoming more common and more expensive. . For this reason, liability coverage is the most important part of car insurance.
• Comprehensive - Protection from the cost of non-collision damages, vandalism, theft, weather-related damage, or natural disasters. Comprehensive coverage typically pays for the cost of repairs, or in the case that the vehicle is totally destroyed or stolen, the cost of a replacement vehicle - at "cash value" of the old vehicle. A deductible lessens the amount you are paid.
• Uninsured Motorist - Protection from costs associated with an accident caused by another driver with insufficient liability coverage.
• Collision - Protection from the cost of repairing or replacing your own vehicle if damaged in an accident. A deductible lessens the amount you are paid.
• Medical - Pays medical costs to you or other parties for accidental injuries associated with an accident. There are limits specified in your policy regarding maximum amounts paid for each incident.
• Towing and Labor - Pays cost of towing your damaged or disabled vehicle. Maximums usually apply.
• Rental Reimbursement - Pays cost of renting a replacement vehicle after an accident.
• Gap Coverage - Pays the difference between the amount owed on a loan or lease and the "cash value" paid by your insurance company in case of theft, fire, or accident. A gap waiver or gap insurance is usually provided with most leases, but not loans. If you are going to be "upside down" on your loan, it's good coverage to have.

Manage your insurance costs

Beyond the requirements of your state laws, you can determine the kind of coverage you want, how much, what deductible, and what add-ons you want.

You can add higher liability coverage, beyond the outdated minimum requirements of your state laws, which can be a smart thing to do in these days of muti-million dollar lawsuits. If your auto insurance policy doesn't cover the full cost of a large settlement, you may be personally responsible for the remainder.

You can increase your deductible amount. If you have sufficient cash available, you can set a high deductible, which can significantly reduce your premium. However, many people who set high deductibles really can't afford to pay and take a chance that they will never have to. Not very smart.

Dropping collision and comprehensive coverage is another opportunity to save money. You should only do it, however, if you can afford to buy a replacement vehicle or pay for repairs from your own pocket. This strategy is only recommended if you have an old car that that doesn't justify the coverage – as long as you can afford to fix or replace it if you have an accident.

Improving your credit history can lower your insurance cost. Many insurance companies now look at your credit score and offer lower rates to people with high scores. They have conducted studies that show that people who manage their finances well have the lowest claim rate. You should know your FICO® credit score before you begin shopping for insurance.

You can get free auto insurance quotes from eInsurance.com . They work with all the major insurance companies and can find the one that has the best rates for you. You are not obligated to accept any of the offers. It's a great fast way to shop for insurance.

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