Introduction
Insurance is seen as a protection against possible losses and threats when you own a car. Thus, car owners transfer these risks to insurance companies in the form of buying a car insurance. There are many types of insurances and car insurance cost varies from one company to the other depending on the coverage. There are a lot of factors involved that affect the cost of a car insurance plan. Your driving history is one factor. Other things to be considered are the type of coverage you want, model and year of the car, and how many miles you are driving in a year. If you are driving long distances daily either to go to work or as part of your job, this will also the affect the cost of a car insurance.
History
Insurance in general existed at the same time that mankind appeared on earth. In the beginning, some form of insurance was prevalent among merchant traders during the Greek, Roman, and ancient Chinese times. However, the history of automobile insurance did not exist in the United States till the 19th century. It appeared when the car was invented and thought was given on the inevitable or potential damage that a car could cause. The practice of holding the car's owner and driver accountable for damage to property or loss of lives began. Massachusetts and Connecticut were the first states to introduce the car insurance law mandating everyone who owns a vehicle and drives it to take out car insurance. The cost of a car insurance back then was low with compensation ranging from $100 to $10,000.
Features
New Hampshire is the only state in the US that does not impose mandatory insurance. Instead, drivers are required to prove their capability if they are liable during accidents. All other American states require mandatory car insurance.
As more states made car insurance obligatory, the ramifications on the type of policy expanded to include several types and features. While states require buying the minimum insurance, the cost of car insurance depends on the type of coverage you are purchasing.
The cost of car insurance includes a standard coverage that differs according to the type of policy that you buy. However, a standard insurance can cover some or all of circumstances when an accident occurs. Medical coverage is part of the cost of car insurance where the insurance company pays for the medical expenses of the driver and its passengers no matter who is at fault with certain limits.
Bodily injury is another type of coverage that should be included in the cost of car insurance and protects you in cases where you inflict injury on others through driving or operating your vehicle. A good coverage of this insurance is advisable since the injured victim can sue you for all you've got.
Property damage is the amount that will be paid when property or objects are damaged by your vehicle. You can also include a collision insurance coverage where the insurance company pays for the repair of your vehicle in a collision regardless of who is at fault. There is also a coverage that you can include in the overall cost of car insurance like the uninsured motorist bodily injury where you are covered in cases of injury caused by uninsured motorists or drivers.
Thus, the cost of insurance depends not only on the above factors or the types of insurance that you buy. If you are buying comprehensive coverage, this will be more expensive than a minimum auto insurance or just the bodily injury coverage. Another factor that could increase your premiums is your driving track record. If you have so many citations and accidents, your monthly premiums will increase since you are a risky investment on the part of the insurance company. However, good drivers are also rewarded by decreasing monthly premiums. In California, “good drivers” are given discounts of up to 20% as mandated by law.
Purchasing liability insurance is also one things that must be considered when buying a car insurance. A person buying auto insurance should purchase a liability insurance of at least $15,000 for bodily injury and property damage worth $15,000. The minimum amount that you have to purchase for property damage is $5,000.
Tips and comments
Adding young drivers can immediately increase the cost of your car insurance, since they have little experience in driving increasing potential risks for accidents. Talk to your car insurance agent to see how you could lower your premiums without exposing yourself and others around you to significant risks.
