Things You Should Know About Auto Insurance

Whether you shop online or use an agent, buying an auto insurance policy is complicated. While the internet makes it simple to compare policies and rates, it’sstill easy to get confused by all the unfamiliar terms used. The decision-making process is also clouded by longstanding misconceptions or myths about how insurance works.

Insurance companies considers a lot of factors about the vehicle when setting their premiums, including the make and model, age, body type, engine size, and the cost to repair. Here are important things you should know about auto insurance.

HowPrices Are Determined

Each insurance company has its own way of calculating premium prices and coming up with insurance quotes, but they all tend to use the same basic factors. These include obvious ones such as the make, model of the car, how you use the car and your driving record. Other factors that go into the mix include, your age, gender, and marital status.

Statistics show that young drivers and male drivers are more likely to have an accident. On the other hand, where you live determines the insurance rate. Finally, in many states, insurance companies can consider credit scores when calculating premiums. Drivers with better credit have fewer accidents.

TheDifference Between Collision And Comprehensive Coverage

When it comes to auto insurance, this is probably the biggest area of confusion. Many people, it seems they don’t understand whatthey’re buying. Recent studies show that a high percentage of people believe that comprehensive insurance covers damage to their car from a collision.

According to insurance information, comprehensive protects theft and damage caused by an incident other than a collision. Collision provides protection against damage to your car that occurs as a result of collision with another vehicle or other objects. However, both Collison and comprehensive coverage are optional insurance that protect your car.


Finally, buying insurance is like any other purchase. If you want the best price, you need to comparison shop and get insurance quotes from different companies. Every insurance company has a different underwriting policy which results in different prices. You can compare different quotes to ensure you get the best deal.

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