Auto Insurance: Who needs it?

Everybody does. In most states it’s illegal to drive an uninsured vehicle. Not only that, in our litigious society it’s an enormous risk. If you cause a serious accident and you do not have insurance, you could spend some time in a very small room with very little privacy. Or you could lose every blessed thing you own, and then some. Most people do the legal, responsible thing and carry car insurance. But how do you know if you’re with a reliable company? How do you know if you’ve got a good policy? How can you tell if you’re paying too much for your coverage? How do you know how much coverage you need? How can you get the best deal on the coverage you want?

There are no quick and easy answers to these questions. Unless you just blindly sign up for a quickie policy from some mass-mailing promotion, you are going to have to do some research, some reading, and some leg-work. If you’ve just bought your first car, if it came from a dealer it may have a temporary policy. You need to find out. Don’t drive the car until it is insured. If it gets totaled on the way to the insurance office, you lose the car but you still have to pay for it. Don’t think it doesn’t happen, and don’t think it won’t happen to you. Give yourself a little breathing space and do it right so you don’t lie awake worrying if you did the right thing, or worse, think you’ve got your bases covered and find out the hard way that you don’t.

Ratings books
The first step is to do your homework. You will need to call your local library and ask for the reference department. Ask which insurance rating books the library has: Weiss ratings, A.M. Best, Standard & Poor’s, or Edmunds. Ask if the ratings are the most current ones. When you find a library that has a current ratings book, go there and bring a notebook and pencil (remember those?). There is no point in even doing any research on the internet until you check a ratings book and find the listings of companies licensed to do business in your state. Sure, there are insurance companies that advertise nationally, but how can you tell if they’re the best for you if you don’t compare companies? And the best place to compare the companies in the reference section of your local library where all the information you need is compiled right in front of you. It is quicker and easier than trying to find all that information on the net. Trust me. If you haven’t set foot in a library since the fifth-grade field trip, don’t panic. Just ask for the reference librarian and ask her to show you where the auto insurance ratings books are. She will not think you’re an idiot, I promise. Then you set yourself down and do some research; no, you can’t check the book out and no, you can’t take your coffee in with you.

The ratings companies evaluate the reliability of insurance companies. After all, you want to be reasonably certain that if you are involved in an accident, your company will pay up in a timely fashion according to contract. (Your insurance policy is a contract. That’s why you need to read and understand the fine print before you sign it.) Most people want to get the maximum necessary coverage for the least amount of money from the most reliable company. Look only at listings of companies licensed to do business in your state. You’ll be surprised by how many you’ll find. You will want to look at the highest-rated ones but be aware, they may have higher premiums than lower-rated ones. You will not find specific policy information. This is because the ratings books rate the companies, not the policies. When you have your short list of companies to consider, then you can look them up on the internet and compare as much as you can that way.

You will need to determine what coverage, beyond the legal minimums in your state, you want. You need to determine how much deductible (the amount your insurance company expects you to pay up front before the coverage kicks in) you can manage and whether or not you need comprehensive (covers everything except collision) or collision (which may not be worth carrying on a clunker). When you do get the quotes from your short list of companies, make sure the policies have the same features so you can really compare them. If you already have a policy, you can use that for a benchmark to see how others compare.

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