 TITLE: Does My Auto Insurance Premium Go Down When I Turn 25? CONTENT: How Does Car Insurance Work?\n----------------------------\nCar insurance is designed to provide financial protection against the hazards that owning and driving presents. For example, if you're involved in an accident with another vehicle, hit an object or a tree falls on your car, your auto insurance policy may pay to repair or replace your car. If you damage someone else's property while driving or hurt somebody, your liability coverage will help pay for some or all of their associated costs.\nSome car insurance policies also provide other forms of coverage, such as reimbursement for a rental car if your vehicle is in the shop for a covered reason and roadside assistance.\nWhen you apply for car insurance, you'll typically share information about yourself and your vehicle. You'll also need to decide which level of insurance coverage to get:\n*   **Liability** coverage is the minimum that's required by law in many places. It protects other drivers on the road and kicks in to cover medical bills and repair bills if you cause an accident.\n*   **Collision** coverage pays for repairs to your vehicle even if you're at fault for the damage, meaning you hit property, an object or another car.\n*   **Comprehensive** coverage helps cover damage that's caused by events such as vandalism, hail, theft, fire and other natural disasters.\nIf you own your car outright, you have more freedom to pick and choose your insurance coverage as long as it meets the minimum legal requirement. If you lease your vehicle or are still paying off your auto loan, your leasing company or lender likely requires a higher level of coverage. Make sure you understand your obligations when choosing a policy.\nThe amount of coverage you get from collision and comprehensive policies is based on the value of your vehicle, but for liability coverage, you'll need to select limits for property damage and bodily injury. There's no best way to approach this, so it's important to find a good balance between the coverage amount and your budget.\nWhen you submit your application, the insurer will base the cost of your auto insurance policy on several factors, including:\n*   Age\n*   Gender\n*   Marital status\n*   Where you live\n*   Vehicle type\n*   Your driving record\n*   Your annual mileage\n*   Your credit history (in states where that's allowed)\nIt's important to shop around and get quotes from multiple insurance companies because each one weighs these factors differently. END