In an effort to better educate consumers about their auto insurance coverage, we've put together a list of items everyone should know with regard to auto insurance here in Arizona. Knowing this information will help you avoid some of the pitfalls that many people run into with their insurance companies, especially when making a claim or shopping for a better rate.

You will pay dearly for being under-insured. Purchasing state minimum coverage could result in financial ruin if you are involved in an at-fault accident. Your wages could be garnished, you could become a party in a major lawsuit and you could lose the ability to obtain credit for future major purchases. The cost to raise limits is relatively small in comparison.

Excellent credit means better premiums. Most insurance carriers give significant premium discounts for clients who have excellent credit and apply surcharges to others. If you have good credit, get quotes from those carriers who give the best discounts, but if you have bad credit make sure you receive quotes from those carriers that do not penalize as much for having a low credit score.

The car model you drive affects your premium. Before you purchase your next car call your agent to find out what it would cost to insure it. Besides the age of the vehicle, the accident history of the vehicle as well as the cost of the replacement parts have a major influence on the cost of insurance.

Paying your insurance premium in full or via Electronic Funds Transfer saves you money. Many carriers now provide an excellent discount to clients who choose to pay their premium in full or automatically from a checking account or credit card. In addition, some give an additional discount for increasing the term of their policy from six months to a year.

Stolen or damaged personal items are NOT covered by most auto insurance policies. Items not considered part of the vehicle are not covered unless added through an endorsement. However, you can receive coverage through your homeowner's policy.

Bad drivers will pay a lot more. Expect to pay 25 - 40% more in increased premium for an at-fault accident. Likewise, minor and major moving violations will add more premium on top of any accident. Carriers include these events from 3 to 5 years in rating potential clients.

You will pay for loaning your car to a friend or non-household member. If a person who you loaned your car to gets into an accident that is deemed to be at-fault, you will need to file a claim with your insurance company and pay any deductible. Insurance follows the car first then the driver. While the accident is not your fault you will still lose your claim free discount for future premiums for at least three years.

The value of your "totaled" car might surprise you. Insurance companies do not use the Kelly Blue Book to determine value at the time of an accident. They have their own software programs to determine a car's value that takes into account mileage and pre-existing condition. If you have a loan or lease get gap insurance to cover the difference of what you owe versus what you will get from the insurance company based on depreciation. Keep good maintenance records and let the insurance company know of recent part repairs and tire replacement.

Hopefully this knowledge will assist you in obtaining the coverage you need along with getting fairly compensated for an auto claim.