Used Car Insurance
Insurance is required for anyone to legally drive a vehicle on the road. Auto insurance is regulated by state governments. Each state has its own insurance commission, which regulates rates and handles complaints. An insurer has to have a state license in order to sell insurance in that state. The main umbrella organization of state insurance commissions is the National Association of Insurance Commissioners (NAIC). There are many auto insurance companies, and a wide price range(premium) for the service.
Types of coverage
It is very important to understand what your insurance for your used car covers. There are different parts to your insurance that cover different things:
Collision
This is the part of the policy that pays for the damage to your car caused by a crash, regardless of responsibility.
Medical
This coverage pays the initial medical bills for you, members of your family and passengers in your used car. It also covers you and those in your household if you're a passenger in a car involved in a crash, or if you're a pedestrian struck by a car.
Comprehensive
This pays for damage to the vehicle caused by non-crash events such as theft, vandalism, striking an animal, storms, etc.
Uninsured motorist
This covers your damage and personal injury when you're hit by an uninsured motorist.
Liability
This pays for bodily injury or property damage that you become legally responsible for as a result of driving your vehicle. Your liability coverage will not pay for injuries to your own family members in the car.
Gap insurance
This coverage provides for the difference between the amount paid under collision or comprehensive coverage to cover a total loss and the amount to pay off the lease or finance contract balance on the vehicle. Many lease or finance contracts include this coverage, but if yours does not you should consider including the coverage on your used car policy.
What to Look For
When buying auto insurance for a used car, it's important to consider not only the price, but also the carrier and the coverage. Quality of service is just as important as price. You want to find a well-known and established company. One who has the financial strength to pay its claims. Know beforehand how the company processes their claims, and make sure it is convenient to you. Ask for references from friends and family about their experiences with the company.
How Much You Pay
Auto insurers generally bill you every six months in order to have premiums reflect their most recent claims expenses on your used car. You can usually arrange with your insurer to make monthly payments, but breaking up your premiums into smaller payments is likely to add to the total cost of the premium.
A combination of factors determines your premium: How much coverage you want, your driving record, how large a deductible you pay, theft/safety stats on your used cars model, how much you drive, and accidents statistics of your area. Insurance companies raise premiums when there is an increased posibility for claims. Here are some of the factors they look at:
Claims History
A main factor for car insurance rates is the claims history. If the used car you have has a high rate of theft, then you will have a high rate of insurance. They will charge you more simply because the risk is greater that you'll file a claim and they'll have to pay it. They will also increase your rate on your used car if it is known to be a model that has a high repair rate or is accident prone.
OffRoading-
Car insurance companies know that off-roading is more likely to cause damage to a vehicle, thus creating a claim. It is often more expensive to insure used cars with four wheel drive.
Who You Are
If you're a single male under the age of 25, your are considered accident-prone . Your gender and marital status come
into account too. Married, middle-aged, non-smoking mothers represent the lowest rates.
Where you live may increase your rates, as New York has some of the most expensive in the country. Living in an urban area typically triggers higher rates. If your driving record is full of at-fault accidents, your premium autimatically goes up.
Damage Power
If you have a used car, such as a big SUV, that would do the most damage in an accident with other cars, the insurance is likely to go up. However, larger vehicles tend to be safer in collisions, so this sometimes offsets costs.
Imports
Imports, particularly from Europe, have very expensive or hard to find replacement parts. Car insurance companies don't want to pay for parts that are way above the average price. If your used car is an import, you may see higher insurance rates.
Powerful Engines
You may find that a used car with a particularly powerful engine has a higher premium. If low insurance rate is important, than go for a smaller, less powerful used car.
If you want a good insurance rate on a used car, then it will take a good effort. Compare prices, look for a better deal, get coverage for only what you need, pay a higher deductible, drive safely, and find a used vehicle your insurance company prefers: one with low theft rates, high safety rates, less powerful, 2WD engines, and domestic cars.