Car Insurance

Protecting your vehicle from the unforeseen

When buying new car insurance or looking to find a better deal on your existing coverage, there are some important things to keep in mind. First, the Internet is absolutely your best friend. Many online insurance retailers now offer comparison quotes with other competitors, figuring that you're going to look around anyway. And don't resign yourself to paying higher premiums just because of some speeding tickets - every company looks at the marketplace in a slightly different way, and one firm may consider your business an opportunity while another may want to avoid it. It's nothing personal. Keep looking until you find what's right for your individual circumstances.

The first question to ask is how much coverage you need. With the exception of four states - New Hampshire, Wisconsin, Tennessee and South Carolina - you must have liability insurance. The minimum amount by law in most states is between $40,000 and $50,000. Most experts, on the other hand, recommend a minimum of $100,000 for one person in an accident and $300,000 for more than one person. If you have substantial assets, you'll want to obtain higher amounts, to protect yourself from lawsuits in cases where the accident was your fault. If you have very little to protect financially, the bare minimum will cost you less.

In addition to liability insurance, 15 states require that you purchase Personal Injury Protection, which covers your hospital expenses, lost wages and any other costs due an accident. Generally, this protection will cover 80 percent of your total losses. Lastly, there is the question of comprehensive coverage, which covers fires, theft and such things as objects falling on your car. If you lease your car, both comprehensive and collision coverage tend to be mandatory; and if you have a luxury car, it's essential. Those owning older models might be wise to pass on this coverage.

Whether you have existing insurance or you are getting new coverage, remember to keep the quotes you receive comparable. For instance, company A may provide a quote that is $50 a month more than company B provides, yet still could be more attractive. How? It's simple: Company A may be quoting based on a higher dollar amount of liability insurance than Company B. This makes for an unfair comparison. Therefore, to keep your analysis straight, make sure you are asking for the same numbers from every company when seeking a quote. This is also important if you are reassessing your existing coverage - you might actually be paying a reasonable rate but have more coverage than you need given your circumstances. As the saying goes, compare apples to apples.

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