Action Steps
The best contacts and resources to help you get it done

Figure out whether the state minimum coverage is enough vehicle insurance

With the costs of autos skyrocketing, when you're responsible for totaling a vehicle, you'll have to pay if your insurance is insufficient. Some states have a minimum property damage coverage of $10,000, which won't cover most of the cars on the road. Liability coverage for some states begin as low as $10,000 per person and $20,000 per accident; with medical costs climbing, you could be liable for someone else's medical bills for life.

I recommend: Find out the insurance requirements in your state at Hometown Quotes. Then compare that figure to the information on Allstate's Bumper to Bumper Basics. This website walks you through a step by step process to determine the coverage that's right for you based on your unique needs.

Weigh the benefits of keeping 'full coverage' automobile insurance on your older vehicle

Depending on the age and value of your vehicles, you may consider dropping your comprehensive and collision coverage. Insurance companies advise customers to consider whether this 'full coverage' insurance is really worth paying for. To find out if it's worthwhile, consider the worth of your vehicle based on an 'actual cash value,' the premium and how much you'd receive for a loss after reduction of the deductible.

I recommend: Find out approximately what your vehicle is worth at Kelley Blue Book's website. Another option for determining vehicle values is the NADA Guide, which is also available online.

Compare car insurance quotes including an umbrella policy

Depending on the insurance company, some companies include home or boat insurance along with the car insurance policy, which can lower your costs. Check with car insurance providers to see how these umbrella policies can work for you. Umbrellas aren't just for the rich any more; protect yourself and your assets with affordable additional liability coverage of an umbrella.

I recommend: Take the mini quiz online from GEICO to determine whether you should consider a umbrella policy. Then, look at insurance rates in your area for umbrella policies from RLI.

Helpful advice for making the most of this Guide

• •  When comparing car insurance rates, make sure that the car insurance companies haven't compromised coverage to give you a better rate.

Guide to Car Insurance

Strategies to help you find affordable car insurance quotes

By Matt Alderton, Writer, Editor and Media Consultant, Logolepsy Custom Content and Communications

1. In all but two states — New Hampshire and Wisconsin — drivers are required to have car insurance that includes bodily injury liability (BIL) and property damage liability (PDL) coverage, which covers the injury or death of other people and damage to their property in an accident.
2. Many states require drivers to have car insurance that includes personal injury protection (PIP) coverage, which covers costs associated with their own injury or death in an accident.
3. Many states require drivers to have car insurance that includes uninsured motorist bodily injury (UM) coverage in the event that they’re in an accident with an uninsured or hit-and-run driver.
4. Collision and comprehensive coverage are not required in any state, although many auto insurance providers recommend them for the purpose of protecting your own vehicle in case of a breakdown or wreck.

Action Steps
The best contacts and resources to help you get it done

Browse car insurance quotes online

If you need car insurance, online car insurance quotes are a good starting point. Available from all major car insurance companies, they offer a fast and convenient way to research and compare premiums.

I recommend: Get comprehensive online quotes from car insurance providers at websites like InsWeb, Insurance.com, InsuranceUSA and InsuranceFinder, or from companies like Progressive and Esurance, which quote both their own and competitors' rates.

Solicit car insurance quotes from national auto insurance providers

Most major insurance carriers offer car insurance and all that do provide competitive car insurance rates.

I recommend: Among the country’s largest and most popular car insurance providers are AIG, Allstate, Chubb, Farmers, GEICO, The Hartford, Liberty Mutual and State Farm. National associations like AAA and AARP are also good sources for affordable car insurance.

Get car insurance from local and regional car insurance companies

Car insurance quotes can vary dramatically; for some of the most affordable, consider locally based providers.

I recommend: For car insurance in your state, try local car insurance providers and agents. You can find several at Business.com, where you can select your state from within its national automotive insurance directory. Also consider local programs like your state’s residual car insurance program. Organized online by state courtesy of AIPSO, states’ residual car insurance programs exist for drivers with poor driving records who can't easily find car insurance.

Use an independent agent to find car insurance bargains

Buying car insurance via an independent insurance agent can expose you to new resources, practical advice and special rates.

I recommend: To find an independent agent who can sell you car insurance in your town, search the member directory at the Independent Insurance Agents & Brokers of America.

Choose car insurance companies that you can trust

Before doing business with auto insurance providers, review their records with consumers to make sure they are reliable, reputable and responsible.

I recommend: If you subscribe to Consumer Reports, you can check up on car insurance companies in your state and nationwide. Another good resource is your state’s insurance department, as most compile and publish statistics on complaints against car insurance companies.

Helpful advice for making the most of this Guide

• •  Consider buying more coverage than is required by state law; minimum car insurance in your state might not be enough to cover car repairs or medical bills after an accident.
• •  Penalties for drivers who don't have car insurance vary nationwide but might include driver's license and license plate suspension, cash fines, vehicle impoundment and even jail time.
• •  If you're leasing or financing your car, dealerships might require you to have more and better car insurance than is required by your state's insurance laws.
• •  Higher deductibles typically mean lower premiums and more monthly savings on car insurance.
• •  If you own a business, don't forget to buy car insurance for company cars. If you own the vehicles, you'll need a commercial auto policy. If you don't own them, however, you should consider hired and non-owned auto liability coverage, which kicks in if you or your employees are in an accident while driving a personal or rented vehicle for business purposes.

Action Steps
The best contacts and resources to help you get it done

Look at the credit information that auto insurance companies check

Automobile insurance companies use your credit information in their calculations because it's a reliable predictor of loss. However, your credit report may not give them a true picture if the information is incorrect. To make sure your credit report reflects the reality of your finances, have all the information that isn't yours is removed.

I recommend: A TrueCredit report from TransUnion shows (for a fee) your insurance score, how this compares to the norm and what you can do to improve your score. If you find an error on your credit report, you can start a dispute online with TransUnion. Cross-check your information by getting a free copy of your credit report through Experian as well.

Find out how the car you choose affects vehicle insurance rates

Think about the car itself as a variable in your car insurance rates. When you shop for a new vehicle, call your insurance agent to get a quote for a specific vehicle before you make the purchase. It helps to provide a VIN because the same vehicle model with different features can have vastly different insurance rates.

I recommend: Use MSN Money's insurance rate tool to see how your vehicle compares to other vehicles. This tool helps you compare vehicle ratings for liability, safety and damage. Insure.com lists the least expensive vehicles to insure and explains why their rates are so much less compared to other vehicles.

Ask car insurance providers about discounts

Discuss potential discounts with your insurance agent or company, such as a good student discount for high school and college students, driver's education, multiple car discount, auto safety features or a multiple policy discount for having both home and auto insurance with the same company. Check into defensive-driving discounts for drivers of any age. Many states allow the discount to apply to your insurance for three years and can take as much as 10 percent off your premium.

I recommend: Sign up online for defensive-driving courses such as I Drive Safely. Check for a lower cost if you're an AAA member. Also, watch the demonstration of the defensive-driving course from the National Safety Council. You can purchase the class online, and it's offered in English and Spanish.

Helpful advice for making the most of this Guide

• •  Be cautious not to skimp on the coverage to save a buck. An accident without the proper auto insurance can jeopardize your assets, including your home and your business.

Guide to Car Insurance Key Terms

Know and understand the available types of auto insurance coverage

By Michelle Cramer

Action Steps
The best contacts and resources to help you get it done

Bodily injury liability

Bodily injury liability, or BIL, provides insurance coverage if you are responsible for an accident and the other driver/passengers have injuries. The coverage pays the other party's medical bills and pays for loss of income or pain and suffering. Typical coverage is $50,000 per person with a maximum of $100,000 per occurrence, but can be less or more depending on your preference.

I recommend: The Car Insurance Guide provides more details regarding bodily injury liability coverage.

Property damage liability

Property damage liability, or PDL, provides coverage if your vehicle causes damage to someone's property, whether it be their vehicle, home, landscaping or even a mailbox. Typical coverage is $50,000 per occurrence and can, of course, be more or less for your policy.

I recommend: Visit Progressive for more information on PDL, including an example of the coverage in use.

Comprehensive coverage

Comprehensive coverage insures your vehicle and other vehicles you may drive from loss resulting from incidents other than an accident, such as fire, flood, theft, animals or vandalism.

I recommend: Superpages provides an explanation of comprehensive coverage, and Nationwide Mutual Insurance lists examples of incidents that comprehensive will cover.

UM or UIM

UM stands for uninsured motorist, while UIM stands for underinsured motorist. These two coverages provide funds to you if the other party in an accident is at fault, but his policy can't cover your damages and injuries, he has no policy or the accident is a hit-and-run. This coverage also extends to the passengers in your vehicle.

I recommend: Insurance not only explains what UM and UIM are, but also details why these coverage are necessary for all auto insurance policyholders.

Medical payments coverage

Medical payments coverage, also known as medpay or MEDPM, provides a flat payment amount to you and your passengers, regardless of who is at fault, for medical expenses. Personal injury protection coverage (PIP or MEDEX), which is only available in some states, is very similar to medpay but covers more, such as funeral expenses.

I recommend: For more information on medical payments coverage and PIP, visit Esurance.

Gap coverage

If you total your vehicle in an accident, your insurance will pay you what your vehicle is worth, but you still may owe money to a lender for your loan or lease on the vehicle. Gap coverage, also known as GAP insurance or loan/lease payoff, is an optional addition to your auto insurance coverage and helps to offset any amount you may still owe on the car after the insurance payout.

I recommend: Access Edmunds for more information on Gap insurance. For more car insurance key terms, visit Car Insurance.