It is essential to have car insurance for your vehicle. Accidents are a normal occurrence and they do not announce their arrival. Being prepared for all eventualities is prudence. Most importantly, car insurance is mandatory by state laws. Therefore, you should have a through knowledge of different types of insurance for your car, benefits of each, and choose accordingly. This will help you drive tension-free on the road.

Types of Car Insurance There are three main types of car insurance each offering different coverage and consequently available at different rates.

1. Third-Party Only Insurance: This car insurance cover provides for damages to other person or other person's car in an accident. The accident may be due to the fault of any of the drivers. Therefore, you can claim coverage to pay medical bills of other driver or other occupants in his car, damages to his car, etc. This insurance does not provide for any damages to your car or your medical expenses. Similarly, it does not pay for any losses due to theft of your car or damage due to fire, etc.

2. Third-Party Fire and Theft Insurance: This car insurance policy provides coverage for your losses due to theft or damage due to fire. Additionally, this insurance coverage provides for all damages to car and medical claims of other driver. This coverage does not provide any damages to your car or your medical expenses.

3. Fully Comprehensive Insurance: As the name suggests, this car insurance provides coverage for all damages and losses. You can claim damages to your vehicle, your medical expenses, and damages to other person's vehicle, medical claims of the other person or occupants in the other car, etc. irrespective of whose fault caused the accident. This is a total insurance package.

Buying Insurance for Your Car

Normally, you can purchase your car insurance from insurance agents, auto dealers, etc. With arrival of the Internet, there are many more options for purchasing insurance for your car. There are numerous insurance companies on the Internet offering excellent deals at competitive prices. You can choose the one suiting you best by browsing through different insurance quotes. Analyze carefully what each company offers and at what price.

Car Insurance Pricing

Different insurance companies offer different prices for their car insurance. Normally pricing depends on many factors. The most important among them is your individual risk to the company. They need to assess how costly or risky you could be to the company. If you are a safe driver and drive within limits, you pay lower premiums. If you have a history of accidents and many prior insurance claims, you are a high risk to insurance company and therefore they charge higher premiums to provide you coverage.

Besides, your age, sex, your car model also decides your premiums to quite an extent. Insurance companies offer car insurance at lower premiums to female drivers as the intensity of accidents by lady drivers is considerably less, according to statistics. Sports car, luxury cars, etc. command higher premiums as replacement costs are higher and these cars are within high-risk category. Young and new drivers pay more insurance.

Legal coverage is essential to meet associated expenses in an accident. Such expenses could be loss of wages, medical costs, replacement costs, etc. Some costs could be beyond your control and your car insurance could pay for such extra costs through legal cover available as an optional coverage with most insurance companies.

Excess in car insurance is the money you pay up-front while claiming damages to your car in an accident. Such claim could be voluntary or compulsory. You can claim such excess amount if somebody else causes accident. Otherwise, you lose such excess amount. Normally, insurance companies stress on compulsory excess for young drivers as they pose higher risk to the company.

Discounts and Cost-Cutting Measures

It is true that car insurance is a major expense but you can save a lot of money by availing different discounts. Insurance companies offer discounts for good drivers, safe drivers, etc. You can take precautions like fastening your seat belts to ensure a safe ride. Besides, park your car in proper garages and install safety devices like theft alarms, etc. Higher deductibles lower your insurance costs. Do away with comprehensive insurance if your car is very old. Similarly, combine different insurances under a single head to claim discounts.

Although car insurance is mandatory, different states stress on different coverage and amount of such coverage could also differ considerably. Hence, you should choose insurance of your car carefully to avoid being over-insured leading to higher premium costs. Ideally, your insurance coverage should include bodily injuries coverage, liability coverage, and damages to property coverage. Additionally, you may need collision insurance, comprehensive insurance, rental insurance, etc.

Cancellation of Car Insurance

Insurance company can cancel your car insurance in few cases. If you do not pay insurance premium regularly, if there is any fraud or misrepresentation of facts, if your driving license is revoked or canceled during the term of your insurance policy, if you commit any crime, etc. insurance company can cancel insurance of your car.

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