Q: Am I obliged to carry insurance coverage when driving my car?

A: Nearly all states have it as a legal requirement for drivers to carry liability auto coverage as a guarantee that the damages you deliver in a car accidents are paid for. Each state has a minimum amount of liability coverage that a driver must carry with his policy. And even the states that don’t have vehicle insurance as a legal requirement oblige the driver to show proof that he has enough financial resources to pay for the caused damage. Any other types of insurance coverage, outside liability coverage are purely optional and can be purchased with respect to your personal insurance needs.

Q: Is insurance required before buying a new vehicle?

A: If that’s your first vehicle, you will be required to have insurance coverage before even taking it from the dealer. Moreover, if you’re using an auto loan to finance the purchase, you may be required to buy additional types of coverage besides liability. If you already have a car and are changing it to a new one or buying an additional vehicle, you have 14-30 days to report the changes to your insurance company.

Q: How can I get cheap car insurance?

A: Compare insurance quotes in order to see what other providers are offering, and if it turns out that you’re overpaying – switch the provider. If your current rates are quite competitive, compared to other companies, see if you’re taking advantage of all the discounts you can opt for.

When looking for a new car, always make sure that the make and model you are interested in provides cheap auto insurance options. Some cars are a lot cheaper to insure than the others, ask your insurance agent to learn what cars are the most cost-effective from the insurance perspective.

Another way to get cheap auto insurance, although a bit risky one, is to increase your deductibles. By raising the amount of out-of-pocket expenses you can afford before the policy kicks in you get lower premiums. And if you’re driving an older vehicle that has a low market value, you may want to drop collision and comprehensive coverage as it takes depreciation of the car value into account.

You can also adjust the amounts of coverage your policy carries, although experts do not recommend decreasing them to the level of state minimums as it is usually not enough to pay for a serious accident.

Driving less than 7,500 in the course of the year makes you eligible for a low-mileage discount with your insurance carrier. You can save even more money with discounts if using public transportation on a regular basis during the weekdays.

2. Use your auto only for personal purposes

Most insurance carriers will increase your premium or add additional coverage (and price, respectively) for driving more due to business purposes. But if there’s no way to avoid the business use of your auto, you should inform your agent or broker about it, to make sure your vehicle is properly covered in all cases.

3. Raise the deductible

Deductibles and insurance rates are inversely related – the higher is your deductible, the lower is your annual rate. And by raising your deductible from $250 to $500 you will be able to save up to 15% on your rates. On the flip side, you will have to pay more from your pocket if an accident takes place.

4. Monitor your credit rating

Your credit rating is one of the key factors influencing the premium you will have to pay, as insurance companies use it to determine how risky you are as customer. The better your credit score, and the cleaner your record is of due credits and unpaid bills, the “safer” you are considered and the lower your rates will be.

5. Safe driving helps

Having no tickets or car accidents in your driving record for a period between three or five years (depends on the insurance company), will give you really good insurance discount. Getting even one minor speeding ticket can boost your insurance rates up to 10% higher.

6. Buy a less risky auto

Auto insurance companies all have different ratings for evaluating the risk factor of a vehicle, However, most insurance carriers agree in defining sports, muscle cars, flashy and exotic vehicles as being high risk objects, because they are most common targets for theft and vandalism, and also because the owners of such vehicles tend to drive aggressively and risky in general.

7. Move to another place

Living in an urban area is definitely comfortable and convenient for most of us. But living in an urban area will make insuring your car a lot more expensive than in rural areas. Heavy traffic, high theft rates, accident risks – these are what cities are known for, and that’s exactly what makes insurance rates considerably higher in much more populated places across the country.

8. Have a garage

Storing your auto in a garage means that it’s less likely to be hit by another car, stolen or vandalized. Some insurance companies will offer a small discount if you keep your car in a garage.

9. Increase the safety of your vehicle

Most insurance companies tend to offer special discounts to drivers, who install security devices on their cars such as automatic seat belts, anti-lock brakes, airbags and anti-theft systems. The more secured your car is against theft or vandalism, the more likely you will get a discount.

10. Do some comparison shopping

If you are looking for a new policy or already have one, there’s no better way to get cheap car insurance than shopping around. Make sure to get as many quotes from different companies as possible and compare not only the prices but the amounts and types of coverage too.