Everyone needs car insurance, but not everyone needs or wants the same insurance.
Consumers can choose from policies that cover the minimum the state requires; or, at the other extreme, they can get insurance that will pay the replacement value of the car they're driving now if their car is totaled. The more coverage you buy and the lower the deductible, the more you will pay to insure your car.
Prices for the same coverage can vary from one company to another, so consumers should seek at least three quotes from unrelated companies. State insurance departments can provide lists of qualified companies or agents, or you can ask friends for referrals. The main types of coverage include:
• Bodily injury liability, which pays legal defense costs and claims against you if your car injures or kills someone.
• Property damage liability, which pays legal costs and claims if your car damages someone's property.
• Medical payments or personal injury protection, which pays medical expenses resulting from an accident for you or others riding in your car.
• Collision, which pays for repairs to your car caused by collision with another vehicle or other object, regardless of who was responsible.
• Comprehensive physical damage, which pays for damage to your car resulting from theft, fire, hail, vandalism or a variety of causes.
• Uninsured or under-insured motorist, which pays for costs related to injuries or property damage to you or passengers caused by an uninsured, under-insured or hit-and-run driver.
Consumers often can save money by increasing the deductible amount or by doing away with collision or comprehensive coverage on older cars. Other things to consider include:
• Buy cars with low "profile" or low maintenance costs. Cars that are expensive to repair often are favorite targets for thieves. However, some popular models also may be targets for thieves.
• Consider your mileage. If you drive less than other people, you may be able to save.
• Automatic seat belt or airbag discounts.
• Anti-lock brake discounts.
• Discounts for other reasons, such as an accident-free record for three years or longer, drivers' age, driver training, anti-theft devices, students' grades or having more than one car insured with the company.
• Specialty coverage, such as towing or car rental reimbursement, may add to your costs.
Rather than simply renew an existing policy, it's wise to check with other insurers from time to time to determine whether your insurer's rates are reasonable. Ask your insurance company if you can save money by getting policies for your home or other coverage along with your car insurance. However, make sure the costs for those policies are reasonable as well.
The Missouri Department of Insurance has a primer on car insurance online at http://insurance.mo.gov/consumers/auto/documents/AutoGuide.pdf. More information on buying insurance is available from Better Business Bureau's website, the Insurance Information Institute, the Coalition Against Insurance Fraud, the National Association of Insurance Commissioners or the National Insurance Crime Bureau.
Mike Harrison is Better Business Bureau's Mid-Missouri regional director. You can contact him at [email protected] or by calling 573-886-8965.