Quick Facts About Auto Insurance

In the United States, it is a federal law that all drivers have and maintain current auto insurance. Owners of multiple vehicles must maintain coverage on each individual vehicle. This law helps to protect victims of accidents involving cars, trucks, motorcycles, and other land vehicles.
However, there are many levels of coverage that one can choose from, and requirements vary somewhat by state. Here are a few things you ought to be aware of when looking for coverage for yourself.
Insurance involves payments known as premiums. The premium is the amount that you are required to pay in order to maintain your coverage. The amount of the premium usually depends on several factors.
Factors on Which Premiums Are Based
Premiums are based most significantly on risk factors. Not so much your risk, however, but rather the risk that a carrier will be required to pay out. The more they are likely to pay out, the higher your premiums will go. Companies use their own algorithms to determine your risk factor.
Gender is a one factor that an insurance company will look at. Since men are believed to be more likely to be involved in accidents than women (largely due to the much higher number of miles men tend to drive overall and the larger number of male drivers versus female), male drivers are charged higher premiums in general. Teenagers are also considered high risk so they are charged higher as well.
Coverage is also another factor. The more coverage you request, the higher the premium will be. This is because the more coverage you request, the more likely your carrier will be required to pay out should an accident occur.
Deductibles also have a say on the premium. This is the amount that the car owner is responsible for before the insurance kicks in and takes over. A higher deductible is most of the time correlated to lower risk so it may lower your payment as well.