Avoid unnecessary coverage
Before you opt for a particular policy, make
sure you're not paying for coverage you don't want,
or duplicating coverage you already have via other
insurance. Once again, let's drill through the Big
Four coverage areas, rooting out potential areas
for cutting costs.
Liability: Some people (usually those
with considerable assets) have what are called
"general" or "umbrella" policies that cover a wide
range of potential liabilities, in or out of the
car. If you're one of these upscale individuals
you'll probably still need some auto liability
insurance--but you may be able to opt for a much
lower level. Ask the insurers who issued your
umbrella policy for an exact reckoning of how
you're currently covered in case of automotive
Medical: As we mentioned in the previous
step, if you have major medical insurance you
probably don't need special medical coverage for
car accidents. But check with your medical insurer
first before turning it down.
Collision/comprehensive: Got a fancy, spanking new deluxmobile?
Then you'll probably want insurance in case of an accident. But
if you're driving a clunker, you might consider foregoing collision/comprehensive
insurance; the costs, compounded over just a year or two, might
be more than the potential cost of repairs (especially if you're
willing to live with dents and dings). Just make sure you can afford
a replacement when and if the time comes: a fender-bender might
mean a day or two in the shop for a new car, but the end of the
line for a worn-out jalopy.
Uninsured/under-insured drivers: Again,
if you have major medical coverage and disability
insurance, this coverage will probably prove
redundant and you can consider declining it.
However, it could provide payments for pain and
other non-economic damages, so it does offer some
additional benefits. It will also cover your
passengers, who might otherwise be stuck with
medical bills and other costs if they are injured.
That said, you are neither legally required to do
this, nor would you be liable for their injuries.