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2TORIAL
Learn2 Shop for Car Insurance (continued)
Step 1: Calculate the minimal coverage you need

A car accident can prove extremely expensive, especially if personal injury is involved. In fact, "under-insured" drivers could find themselves in deep financial trouble, losing their savings, their home--even future wages. So let's look at the appropriate bottom limits to the four main aspects of coverage: you can go higher, but going lower is risky business.

Liability: In order to protect your financial future, liability insurance should be your number-one priority. It covers costs resulting from injuries to other drivers and their passengers, as well as damage to their cars (it doesn't cover you, your car, or your passengers). Such damage can easily run into the hundreds of thousands, or much more.

What level of liability should you get? Most financial advisors recommend that you get insurance at least equal to your personal net worth, though many say you should actually double that amount. Even if you don't have too many substantial assets (such as a home, a retirement account or other property), you should consider coverage of $50,000 for damage to property and $100,000 per individual, with a cap of $300,000 per accident.

Medical insurance: Does your health insurance cover you in the event of a car accident? Then your need for similar coverage in an auto policy is probably zero. If you don't have regular medical insurance, then do by all means get an auto policy with medical clauses that specifically covers injuries resulting from car accidents, with a cap of at least $250,000. But take note: it might make more sense to put that money toward a general health policy.

Collision/comprehensive: If you're leasing a car, or still making loan payments, you may be required to supplement liability with collision or comprehensive insurance. If your car is especially valuable, you should also seriously consider collision/comprehensive insurance--just as you'd insure anything of great value. Coverage is generally for the book value of the car, minus any deductible (the amount you pay out of pocket before an insurance company's coverage kicks in).

Uninsured/under-insured driver: When you are hit by a driver without assets, without adequate insurance, or without insurance at all, you could get stuck with the bill. If you lack major medical and/or disability insurance, you should strongly consider this coverage.



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2TORIAL STEPS
Introduction
Step 1: Calculate the minimal coverage you need
Step 2: Avoid unnecessary coverage
Step 3: Consider high deductibles
Step 4: Research special discounts
Step 5: Comparison shop on the Internet
Step 6: Contact your state's insurance commissioner

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