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However, David Snyder, assistant general council for
the American Insurance Association in Washington, D.C., disagrees
with Swan.
"Even if you have health insurance, think twice before
you reject or waive PIP coverage," he argues. "PIP usually provides
dollar-one coverage [with no deductible]. People with significant
deductibles and co-pays should have PIP."
Collision and Comprehensive
These are two parts of a policy that can add
significant costs to your premium. Collision provides coverage in
the event of any kind of accident, whether it's with another car
or an object, such as a utility pole or fire hydrant. Comprehensive
insurance covers you in the event of theft or natural disaster.
If you have an older car, and the cost of repairing
or replacing your car is likely more than its value, then experts
such as Swan advise waiving both collision and comprehensive coverage.
Keep in mind that any coverage you decline on your
policy, you'll need to have when renting a car, from Avis or Hertz
for example, says Neagle. So, if you decline collision and
comprehensive, you should either accept a rental car company's insurance
or use a credit card that provides rental car protection just
in case.
For newer cars, you should have a deductible on both
collision and comprehensive that is the maximum amount that you
can afford to pay out-of-pocket for repairs, says Snyder. The higher
the deductible the lower the premium. Insurance professionals say
that the average policy carries a $500 deductible for both collision
and comprehensive claims.
Uninsured Motorist
As the name indicates, this coverage provides
you protection from crashes with motorists not carrying car insurance,
as well as covering you in the event of a hit-and-run accident.
Also, uninsured motorist insurance coverage comes into play when
an at-fault driver doesn't have enough liability coverage to pay
for the damages from an accident. Most states require drivers to
carry uninsured motorist coverage.
Ask for discounts
Now that you understand the basic parts of a
policy, you can save money on premiums by asking your insurance
company for a discount.
Discounts available vary by
state, but typically include: safety equipment discounts (air bags,
anti-lock brakes and security systems), multipolicy discounts (if
you have other insurance coverage with the same company or have
several family members on the same policy), good student discounts
and premium reductions for driver's education classes.
The experts recommend shopping around with several
insurance companies to get the best premium rate, especially if
you have a clean driving record for the last three years. The longer
that you avoid an accident, the better the cost of the insurance.
"Every day you drive, you're helping to determine
what your insurance cost is," advises Snyder. "By driving carefully,
you're lowering your insurance payment."
Finally, car insurance premiums will
be higher for cars that are attractive to theft and that suffer
extensive damage during a crash. The CCC Information Services
conduct studies and release an annual listing of the most frequently
stolen vehicles.
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