17998769_sInsuring your car isn’t just a great idea–it’s a legal requirement in many states. Even if you drive your car just a few miles a month, you should insure it to protect yourself and those around you.

Types of Coverage

There are four main types of car insurance, though insurance policies don’t necessarily offer each kind of coverage. The four types of coverage are:

  • Liability. Applies to property damage or injuries that you cause to other people while driving. This coverage is essential.
  • Medical. Applies to medical treatment for you and your passengers if you are in an accident. This coverage may include disability insurance and compensation for pain and suffering.
  • Collision/comprehensive. Applies to the damage to your car in an accident that you cause up to the book value of your car. Comprehensive applies to other kinds of damage or loss from theft, vandalism, natural disasters, etc.
  • Uninsured/under-insured drivers. Applies to your costs if an uninsured or under-insured driver (i.e., who can’t pay) injures you or your passengers.

Other insurance extras that are either included in your policy or cost extra are towing and car rental.

Factors That Determine the Cost of Insurance

  • Location (insurance rates are usually higher in urban areas)
  • Age
  • Driving record
  • Sex
  • Kind of car
  • Theft rate
  • Size of deductible
  • Type and level of coverage

Ways to Lower Your Insurance Costs

  • Raise your deductible. Increasing your deductible from $250 to $500 or even $1000 could reduce your comprehensive/collision cost by 15-40%.
  • Discontinue collision and or/comprehensive coverage on older cars. If your car is worth less than $4,000, it may not make sense to pay for collision/comprehensive coverage.
  • Insure through a single insurance company. Insuring all of your vehicles and your house through the same company should qualify you for a multi-policy discount.
  • Reduce coverage extras. It does not make sense to pay extra for towing coverage if you belong to a club (like AAA) that provides free towing.
  • Ask for discounts. You may be eligible for discounts if your car has ABS, airbags, an anti-theft system, or if you drive few miles, are a senior citizen, have an AAA membership, or are a student and have good grades.

Finding Affordable Insurance

The Web has created new marketplaces for insurance providers, making it easier and faster to get affordable insurance rates. All you have to do is enter the type and level of insurance that you’re looking for once.

MsMoney.com has partnered with InsWeb–the leading online insurance marketplace–to provide you with a free service that allows you to compare quotes from some of the most trusted names in insurance. Simply fill out a profile, review your quotes, and choose the one that’s best for you. There’s no sales pressure or hassles using InsWeb–and you may be able to save money. Get free quotes now to see if you can save!