What It Is
In all likelihood, you've had car insurance since you were 16, but to review -- your car insurance is designed to protect you as a driver, your passengers, your car(s), and anyone else who comes in contact with your car(s).
Who Needs It Most
If you have a car, you need auto insurance -- most states have minimums, at least for liability (what you'd have to pay someone else), and insurers will generally suggest coverage ranges for the other types of car insurance based on where you live, what you drive, and how you drive. Beyond that, consider your needs -- if your car is pricey, up your collision coverage.
Questions to Ask
- Are you covered against uninsured drivers, or do you need to get a separate policy?
- Do you want or need roadside assistance with your policy? (If you belong to a roadside assistance club like AAA, you don't need double coverage.)
- Will your policy pay for a rental if your car is out of service?
Average Cost
$870 per year (per person)
How to Get Costs Down
- As soon as you're married, call and consolidate your policies -- typically, married couples who consolidate save about 10 percent per spouse. Even if one of you has a less-than-perfect driving record, there are other factors that also influence your insurance costs -- including where you live, your age, and how much you drive your car. So it may still save you money to combine policies, unless one of you has more than six accidents or a DUI on your record.
- Consider dropping your collision coverage if your car is more than five years old, or if you show a good credit score; don't travel many miles; belong to an auto club or professional network; drive a car with safety features like airbags and anti-lock brakes; have taken driving classes; or have anti-theft devices like The Club.
- Research the insurability of any new car you plan to buy. Low-cost but often-stolen cars (like Honda Civics, which are attractive to car thieves because they're easy to strip for parts), or models that are hard to repair (like vintage cars or models with enclosed engines), may actually cost you more long-term versus a more expensive but lower-maintenance vehicle.
What to Remember (if You Only Remember One Thing)
Just like your actual car, car insurance coverage contains a lot of moving parts that can be fine-tuned for optimum performance. Calculate how different benefit limits on different kinds of coverage affect your premiums, and consider whether you'd save money in the long-run by raising your deductible.
[Nest Note] Consider getting a policy with a higher-than-standard deductible (say, you're responsible for the first $500 in damages rather than the first $250). The increase in what you'll pay may be offset in the long-run by lower monthly payments.
illustration by Joora Song
by Kristen Finello
2/11/08
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