Car Insurance Tune-Up

By TOM TORBJORNSEN

With over 35 years of automotive experience, Tom makes learning about cars easy. Get more of his advice:

We keep our cars tuned up, but what about our automobile insurance? Recently I had a chat with an insurance broker. The topic of conversation? Smart insurance buying.

After our conversation I realized that the biggest mistake an uninformed consumer makes is to regard insurance coverage as a commodity... as generic as the oil purchased for the car. An insurance policy is a personalized service contract that provides coverage for you and your family in the event of an accident. When you read your auto policy the language is anything but simple. And everyone knows it's not inexpensive! To regard auto insurance as a "necessary evil" to be purchased as cheap as possible is a foolish and ignorant approach to this very necessary aspect of driving an automobile. Based on our conversation, here's how to get the biggest "bang for your buck" when purchasing automobile insurance:

BUY AS HIGH A LIABILITY LIMIT AS YOU CAN AFFORD - This is the coverage that protects you in the event you get into an accident and are accused of negligence. Remember, a lawsuit can be brought against you despite your culpability - and damages sought in today's court actions seldom fall below six figures. Often the spouse of the injured party seeks more than $100,000 for "loss of services." This doesn't include the dollars requested for the injured party. Question... how far would your present policy go in responding to this kind of a suit? Be realistic, not ridiculous in determining the amount of liability you need. Most insurance companies will write liability coverage up to at least $500,000. Adding an umbrella liability policy in the amount of one, two, three million (or more depending on your situation) will go a long way in protecting you. Only buying $50,000 coverage? See how long that lasts you when you get the hospital bill from the party you hit for three or four weeks... oh, and I forgot about the "loss of services."

BUY SUPPLEMENTAL UNINSURED MOTORIST COVERAGE - This is the coverage that protects you in the event you are involved in an accident with an uninsured motorist, or a motorist with low limits of liability insurance coverage. Let's say that you're involved in an accident resulting in serious injury to you, and possibly your passengers. No matter what the amount a court might award, if the negligent party has inadequate liability coverage and few assets, your award is of little value. The Supplemental Uninsured Motorist portion of your policy provides the liability coverage the other driver should have had, up to the limit you carry on your policy.

CARRY HIGH DEDUCTABLES ON YOUR PHYSICAL DAMAGE - Higher liability as well as Supplemental Uninsured Motorist coverage means higher premiums. A good way to help pay for this is to carry as high a deductible on your collision and comprehensive as you can reasonably afford. This brings the price of the premiums down.

CONSIDER DROPPING PHYSICAL DAMAGE ON OLDER VEHICLES - This is not an easy call. Typically, an insurance company charges less for collision and comprehensive on an older vehicle. In general, when a vehicle is six years old or more, it's worth considering this change. Things to take into consideration when trying to make this call are value of the vehicle, its condition, how much you drive it, and the policy charge for the coverage. At some point the charge for the coverage will not be worth what you could collect in the event of a loss. Never skimp on liability coverage in order to pay for less important physical damage coverage on a vehicle that is worth less than what the policy would pay in the event of a loss.

DEAL WITH AN AGENT THAT HAS YOUR CONFIDENCE - Make sure your agent gives you the service you need. Ask questions about coverage under different scenarios and ask for recommendations. Deal with a full-service agency; one that offers all the products you need and has the staff to make the complex insurance marketplace bearable.

People spend money on maintaining their cars and ignore their insurance coverage. When you get in an accident and have the other party's lawyers breathing down your neck is not the time to find out that your insurance coverage was inadequate. Get with your agent and tune up your insurance policy now!!!

'Til next time...Keep Rollin'

Check out Our Autos Repair Blog and Read More from Tom:
- AOL Autos Repair Blog
- Car Air Conditioning 101
- Synthetic Motor Oil: Should You Use It?

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Toolmanjim45 02:07:49 PM Sep 01 2008

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Many people make the mistake of thinking that they're immune from large liability settlements because they don't have much in the way of assets. What they forget is that one "asset" they have is FUTURE INCOME. It's very possible to be sued and ordered to make payments for as many years as it takes to retire the settlement. In other words, 100% of your future income is at risk --- not just the assets you've already accumulated.

Mikbosack 01:19:37 PM Sep 01 2008

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Everyone should have insurance for assurance. Even if you have nothing now, you may one day have something and they will gladly take it from you.

Kmj41co 12:43:42 PM Sep 01 2008

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If you have a good insurance company behind you they will help you. You do need to make sure you have enough coverage to cover an accident if you are at fault and that will help with your peace of mind. As far as attorneys go, they will also shoot for the stars in trying to get more money for their clients. Just remember that by just having an attorney does not guarantee a higher settlment. A good adjuster will review all medical records to verify they are reasonable and necessary for the care given for the injury. Many people attempt to claim more injuries than are really there. Your adjuster will also review all prior medicals if necessary. Just take care of yourself and make sure you carry enough liability coverage because there are alot of people who think once they are involved in an accident they will be paid. It is sad but true and that it why when someone is actually really injured it is harder to get what you deserve because insurance companies see so much fraud.

Nikeyanboone 12:27:58 PM Sep 01 2008

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As a licensed insurance agent, I see and hear the tragic stories of drivers that are "underinsured" on a daily basis. Increasing your liability limits is much less expensive than you think. Even if you don't own any property, your most important asset is your ability to earn a living, and inadequate liability limits leaves your income wide open for garnishment. Medical expenses are on the rise, and I have seen many cases of minor accidents in which a driver was rear ended have received Bodily Injury payouts exceeding $225,000 and you can thank the medical professions for that. It amazes me to see professionals with $60,000 vehicles and liability limits under $300,000. You can best believe someone injured by someone driving a BMW or Mercedes will act like they've lost life and limb because the assumption is that they can afford to pay- and they will- one way or the other. So, my point is, the ****************** year you pay to triple your liability limits makes more sense than your majo

Debbert 12:17:26 PM Sep 01 2008

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My husband was rear ended, knocked unconcious and in ICU for 3 days. He had over $70,000 in medical bills. When all was said and done we didn't even recover out of loss expenses. He was out of work for 9 months. I would strongly suggust buying as much coverage as you afford if anything just to protect yourself. If we had bigger limits the insurance company would have at least covered our out of pocket loss.

Mtmist3383 11:41:22 AM Sep 01 2008

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I was a licensed insurance agent for years and unless someone has valuable assets to protect (home, bank accounts) I never recommended anything over $100,000 liability. Lawyers are disgusting, but they generally don't want your fillings to pay for their fees, lol. Personally, I only carry $50,000 liability and I'm not one bit concerned.

Fxtrader151 11:22:49 AM Sep 01 2008

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Wait first he says we need as much as 500k in liability. Then he says we should get uninsured motorist coverage for when the other persons liability doesnt cover all the damages or doesnt exist.The way I see it I'll stick with the 50k in liability and let the other guys unisured motorist cover the "lack of services"if this wasn't written by an insurance salesman I would be VERY suprised.

Jbrad54235 07:00:56 AM Sep 01 2008

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everybody wants a piece of a pie that doesnt exist

Jbrad54235 06:59:49 AM Sep 01 2008

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If you have no assets or no money why do you need insurance? you cant sell insurance to guy out of work

Stofficer 02:10:33 PM Aug 29 2008

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Full disclosure, I'm an executive for a major insurance company. I've seen it all, fraud claims to terrible claims that keep me up at night. I'll tell you this, anyone driving around with minimum limits might as well gamble with their savings, including their car and home. People sue now for no reason and you don't have to be wrong to be sued or to loose, the other person just has to look sad and have a good lawyer.If you need to save money this is not the place to do it. Shop around but stick with a large carrier as the small ones may be tougher on paying claims and keep as high a deductlbe as you can afford to pay in a claim. If you have a new driver then you also want a Personal Umbrella Policy which can give you even higher limits. The most common reason these large umbrella policies come into play is because of young drivers who severly injure, or worse, another person.No one likes to pay insurance but it is necessary. And by the way, price is not everything. I'm not goin

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