Before you begin shopping for insurance you should check the following: the status of your driving record, your current coverage and the premiums you are paying.You should know how many tickets you have had recently. But time plays tricks and our memories repress painful incidents.
If you can't remember how long that speeding ticket has been on your record, check with your state's DMV. If your record will soon improve, and the points you earned will finally disappear, wait until that happens before you get quotes.
Nothing drives up the price of insurance like a bad driving record.Also, you should contact your auto insurance company or pull out a recent bill. Jot down the amount of coverage you have and what you are paying for it. Take note of the yearly and monthly cost of your insurance since many of your quotes will be given both ways. Now you have a figure in mind to try to beat
Monday, May 25, 2009
Auto Insurance Tips
Ah, car insurance - you can't stand paying for it every month; you can't get away with not having it. And really, it would be unwise (read: incredibly stupid) not to have insurance. Okay, we don't mean to be belligerent here; perhaps you have a perfectly valid reason for not having auto insurance coverage, although we personally can't think of any. But who are we to get all self-righteous on you? Let's focus instead on remedying the situation. If you're like many people, your first priority is to get the bare minimum requirements down. We'll start with that, and work from there.
Most states require that you have liability insurance. This covers your arse when you're at fault in an accident. (Remember all those near misses in parking lots and while changing lanes on the freeway when you were blabbing on the cell phone, trying to change the CD, or pushing the slobbering dog/significant other out of your face? Well, your luck won't hold out forever, honey.) If you live in New Hampshire, South Carolina, Virginia or Wisconsin, you aren't required by law (yet) to have liability coverage.
For the rest of us, the mandatory coverage varies according to state. In the chart below, minimum liability limits are read as follows (in thousands of dollars): bodily injury liability for one person in an accident/bodily injury liability for all people injured in an accident/property damage liability for one accident. So, for Alabama, the minimum requirements are $20,000 of bodily injury liability for one person, $40,000 bodily injury liability for all people and $10,000 property damage liability.
Most states require that you have liability insurance. This covers your arse when you're at fault in an accident. (Remember all those near misses in parking lots and while changing lanes on the freeway when you were blabbing on the cell phone, trying to change the CD, or pushing the slobbering dog/significant other out of your face? Well, your luck won't hold out forever, honey.) If you live in New Hampshire, South Carolina, Virginia or Wisconsin, you aren't required by law (yet) to have liability coverage.
For the rest of us, the mandatory coverage varies according to state. In the chart below, minimum liability limits are read as follows (in thousands of dollars): bodily injury liability for one person in an accident/bodily injury liability for all people injured in an accident/property damage liability for one accident. So, for Alabama, the minimum requirements are $20,000 of bodily injury liability for one person, $40,000 bodily injury liability for all people and $10,000 property damage liability.
Solicit Competitive Quotes
Now that you have made several practical and philosophical decisions, it's time to start shopping. Begin by setting aside about an hour for this task. Bring all your records — your current insurance policy, your driver license number and your vehicle registration. Drink plenty of coffee. Have a phone at your elbow. And, of course, power up your computer.Begin with the online services.
If you go to or other online insurance quote sites, you can type in your information and get a list of comparative quotes. These forms take about 15 minutes to complete. If this bores you, just remind yourself how much you will be saving and that you can use the money to buy something nice for yourself. If the entire shopping process takes you two hours to complete and you save $800, you're effectively earning $400 an hour.A few things to keep in mind: 1) When you use quote sites, you may not get instant quotes.
Some companies may contact you later by e-mail, and some that are not "direct providers" may put you in touch with a local agent, who will then calculate a quote for you. (A "direct provider," like Geico, sells an insurance policy to you directly; other companies like State Farm sell insurance through local agents. We'll discuss the pros and cons of each later.) 2) It's not easy to get quotes from these sites in all states — if you live in New Jersey, for instance, you'll probably find it faster to pick up the phone, since most insurers in this state currently don't provide online quotes.
If you go to or other online insurance quote sites, you can type in your information and get a list of comparative quotes. These forms take about 15 minutes to complete. If this bores you, just remind yourself how much you will be saving and that you can use the money to buy something nice for yourself. If the entire shopping process takes you two hours to complete and you save $800, you're effectively earning $400 an hour.A few things to keep in mind: 1) When you use quote sites, you may not get instant quotes.
Some companies may contact you later by e-mail, and some that are not "direct providers" may put you in touch with a local agent, who will then calculate a quote for you. (A "direct provider," like Geico, sells an insurance policy to you directly; other companies like State Farm sell insurance through local agents. We'll discuss the pros and cons of each later.) 2) It's not easy to get quotes from these sites in all states — if you live in New Jersey, for instance, you'll probably find it faster to pick up the phone, since most insurers in this state currently don't provide online quotes.
Auto Insurance Tips
When you really need it, you will be glad you took the time to purchase good car insurance. The purpose of the articles in this section is to prepare drivers with the right auto insurance policy before it is too late. Then, if trouble strikes, you and your family — and your family's finances — will be protected.
Everyone knows that car insurance can be expensive. However, in the Internet era, getting an online car insurance quote is fast and easy. With the resources and information we present here, it is easier than ever to compare auto insurance quotes. We will also tell you what differences exist between one auto insurance company and another. Basic coverage is described and comparative shopping strategies are clearly outlined. What about teenage drivers? We take a special look at shopping for car insurance for them. What if you have auto insurance but can't keep up with the expensive premiums? We might be able to show you how to continue getting the coverage you need while reducing your payments. And, finally, what about the mysterious type of insurance called "gap insurance"? This is a form of auto insurance that usually applies to leased cars. In some cases, however, a car buyer might also need gap insurance. We'll tell you when and how much to buy
Everyone knows that car insurance can be expensive. However, in the Internet era, getting an online car insurance quote is fast and easy. With the resources and information we present here, it is easier than ever to compare auto insurance quotes. We will also tell you what differences exist between one auto insurance company and another. Basic coverage is described and comparative shopping strategies are clearly outlined. What about teenage drivers? We take a special look at shopping for car insurance for them. What if you have auto insurance but can't keep up with the expensive premiums? We might be able to show you how to continue getting the coverage you need while reducing your payments. And, finally, what about the mysterious type of insurance called "gap insurance"? This is a form of auto insurance that usually applies to leased cars. In some cases, however, a car buyer might also need gap insurance. We'll tell you when and how much to buy
How Much Auto Insurance Do You Need?
ONE TRIED AND true way to reduce your auto insurance premium is to hike the deductible on your collision coverage and skimp on your liability coverage. Sometimes this can make sense, but often it's not worth the extra risk. In this section we'll explain several of the coverages you're likely to be offered as you shop for insurance (some are mandatory). Then we'll help you figure out how much to carry of each type.
Bodily Injury LiabilityThis coverage, which is required in most states, compensates the driver of the other car and its passengers in the event you get into an accident. It also covers the passengers in your car. The main consideration here is protecting your assets against lawsuits that arise from auto accidents. "But I'm a careful driver," you say. It doesn't matter. You can get sued even if the accident is not your fault.
Bodily injury liability is sold in standard increments that designate both how much coverage you have per person in an accident, with an additional limit per accident. For example, if you buy bodily injury worth $100,000/$300,000, each of the people you injured could be compensated $100,000, but only up to $300,000 per accident.
How much coverage you need is a function of what assets you have to protect. If you make $30,000 a year and rent your apartment, $50,000/$100,000 should suffice. But if you make more than $75,000 a year, own a house worth $150,000 and have $40,000 in mutual funds, you should consider at least $100,000/$300,000 of coverage. Our Net Worth Calculator can help you estimate just how much coverage you should get.
How much you'll pay to increase your bodily injury liability coverage depends on several factors, including your age, marital status and driving record. It also depends on where you live. For example, in rural Cortland County, New York, a 35-year old married male would pay an average of $87 annually to boost his coverage from $25,000/$50,000 to $100,000/$300,000, according to the New York State Department of Insurance. In Manhattan, however, where the frequency of bodily injury is much higher, that same man would have to shell out an average of $251 more a year.
One more option: If you have substantial assets, buy $300,000 in bodily injury on your auto policy and $300,000 on the liability portion of your homeowners policy. Then spend another $150 to $300 for a $1 million umbrella policy, which covers you against all manner of liability claims. Should you want still more coverage, the cost for an additional $1 million in coverage is minimal: It's typically $75 to increase your coverage to $2 million, and then $50 for each million after that, according to the Insurance Information Institute. Back to Top
Property Damage LiabilityThis coverage will pay for the repair and replacement of the other guy's car or property in the event of an accident. State-required minimums are as low as $5,000, but if you total somebody's Lexus, that won't begin to cover the damage.
You're better off with a minimum of $50,000 for each vehicle you own. And to be truly safe, you should have a total of $100,000 coverage. Back to Top
Personal Injury ProtectionThis is definitely one coverage you can skimp on. PIP coverage pays for the medical and funeral costs associated with an accident for you and your family — regardless of whose fault it was. But if you already have separate health, life and disability policies, you can probably forgo this one altogether. Check those policies first, but chances are those sort of expenses are already covered. Back to Top
Uninsured or Underinsured MotoristThis coverage pays for medical and funeral costs for you and your family in the event you get in an accident with either a hit-and-run driver or a driver who doesn't have enough auto insurance. These policies usually cover bike and pedestrian accidents, too. Given the prevalence of uninsured drivers nationally, this coverage is essential. On average, it costs less than $40 a year for $100,000 worth and will make up for anything your medical insurance doesn't cover. Back to Top
Collision and ComprehensiveCollision reimburses you for the full cost of repairs or replacement of your car after an accident. Comprehensive covers you in the event your car falls victim to a natural disaster, vandalism or theft. With either coverage, the lower the deductible you choose, the more the policy will cost you. We recommend that you always choose the highest deductible you can afford ($1,000 is fine). After all, the purpose of insurance is to protect you against big losses, not to make you whole to the last dollar. If you have an older car, you might drop this coverage altogether.
Collision and comprehensive — which can account for 30% to 40% of your total premium — are cash-value coverages. That means if your car is damaged, the most you'll recoup is the Kelley Blue Book value, which declines precipitously as your car ages. Here's a good rule of thumb: If the cost of your collision and comprehensive is more than 10% of your car's Blue Book value, it probably makes sense to drop these coverages and save a tidy sum. With most cars, you should approach this limit as the car turns five years old. Understand, however, that if you eliminate the coverages, you'll have to foot the repair bill if you get in an accident that's your fault, or if the car is totalled or stolen. Back to Top
ExtrasWhile insurance companies will try their hardest to sell you any number of extras to go along with the essentials, most of them aren't worth it. Consider rental-car reimbursement, which pays a paltry $15 or so a day while your car is in the repair shop after a collision. Not only is the reimbursement small, the odds you'll need it are remote. The chances are at least even that the other guy will be at fault, and his insurance will pay the full cost of this. Another dubious extra is towing coverage. It costs $25 or more per year on a policy, money you'd be better off putting toward an auto-club membership that would be exponentially more useful. One extra that is worthwhile: Full glass coverage. Auto glass is expensive and an errant stone can ruin a $500 windshield in the blink of an eye.
Bodily Injury LiabilityThis coverage, which is required in most states, compensates the driver of the other car and its passengers in the event you get into an accident. It also covers the passengers in your car. The main consideration here is protecting your assets against lawsuits that arise from auto accidents. "But I'm a careful driver," you say. It doesn't matter. You can get sued even if the accident is not your fault.
Bodily injury liability is sold in standard increments that designate both how much coverage you have per person in an accident, with an additional limit per accident. For example, if you buy bodily injury worth $100,000/$300,000, each of the people you injured could be compensated $100,000, but only up to $300,000 per accident.
How much coverage you need is a function of what assets you have to protect. If you make $30,000 a year and rent your apartment, $50,000/$100,000 should suffice. But if you make more than $75,000 a year, own a house worth $150,000 and have $40,000 in mutual funds, you should consider at least $100,000/$300,000 of coverage. Our Net Worth Calculator can help you estimate just how much coverage you should get.
How much you'll pay to increase your bodily injury liability coverage depends on several factors, including your age, marital status and driving record. It also depends on where you live. For example, in rural Cortland County, New York, a 35-year old married male would pay an average of $87 annually to boost his coverage from $25,000/$50,000 to $100,000/$300,000, according to the New York State Department of Insurance. In Manhattan, however, where the frequency of bodily injury is much higher, that same man would have to shell out an average of $251 more a year.
One more option: If you have substantial assets, buy $300,000 in bodily injury on your auto policy and $300,000 on the liability portion of your homeowners policy. Then spend another $150 to $300 for a $1 million umbrella policy, which covers you against all manner of liability claims. Should you want still more coverage, the cost for an additional $1 million in coverage is minimal: It's typically $75 to increase your coverage to $2 million, and then $50 for each million after that, according to the Insurance Information Institute. Back to Top
Property Damage LiabilityThis coverage will pay for the repair and replacement of the other guy's car or property in the event of an accident. State-required minimums are as low as $5,000, but if you total somebody's Lexus, that won't begin to cover the damage.
You're better off with a minimum of $50,000 for each vehicle you own. And to be truly safe, you should have a total of $100,000 coverage. Back to Top
Personal Injury ProtectionThis is definitely one coverage you can skimp on. PIP coverage pays for the medical and funeral costs associated with an accident for you and your family — regardless of whose fault it was. But if you already have separate health, life and disability policies, you can probably forgo this one altogether. Check those policies first, but chances are those sort of expenses are already covered. Back to Top
Uninsured or Underinsured MotoristThis coverage pays for medical and funeral costs for you and your family in the event you get in an accident with either a hit-and-run driver or a driver who doesn't have enough auto insurance. These policies usually cover bike and pedestrian accidents, too. Given the prevalence of uninsured drivers nationally, this coverage is essential. On average, it costs less than $40 a year for $100,000 worth and will make up for anything your medical insurance doesn't cover. Back to Top
Collision and ComprehensiveCollision reimburses you for the full cost of repairs or replacement of your car after an accident. Comprehensive covers you in the event your car falls victim to a natural disaster, vandalism or theft. With either coverage, the lower the deductible you choose, the more the policy will cost you. We recommend that you always choose the highest deductible you can afford ($1,000 is fine). After all, the purpose of insurance is to protect you against big losses, not to make you whole to the last dollar. If you have an older car, you might drop this coverage altogether.
Collision and comprehensive — which can account for 30% to 40% of your total premium — are cash-value coverages. That means if your car is damaged, the most you'll recoup is the Kelley Blue Book value, which declines precipitously as your car ages. Here's a good rule of thumb: If the cost of your collision and comprehensive is more than 10% of your car's Blue Book value, it probably makes sense to drop these coverages and save a tidy sum. With most cars, you should approach this limit as the car turns five years old. Understand, however, that if you eliminate the coverages, you'll have to foot the repair bill if you get in an accident that's your fault, or if the car is totalled or stolen. Back to Top
ExtrasWhile insurance companies will try their hardest to sell you any number of extras to go along with the essentials, most of them aren't worth it. Consider rental-car reimbursement, which pays a paltry $15 or so a day while your car is in the repair shop after a collision. Not only is the reimbursement small, the odds you'll need it are remote. The chances are at least even that the other guy will be at fault, and his insurance will pay the full cost of this. Another dubious extra is towing coverage. It costs $25 or more per year on a policy, money you'd be better off putting toward an auto-club membership that would be exponentially more useful. One extra that is worthwhile: Full glass coverage. Auto glass is expensive and an errant stone can ruin a $500 windshield in the blink of an eye.
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