2008 Insurance Guide
insurance
20 things to know about auto insurance

The good news: Taking your total liability coverage from the standard $300,000 to $500,000 will only cost about $60 more a year for two cars (or for one car if you're a younger driver).

"But younger people who have a fairly low net worth don't need hundreds of thousands in liability coverage," says Bill Feldhaus, associate professor of risk management and insurance at Georgia State University.

Best bet: Talk with an insurance professional you trust and come to a decision on deductibles and liability coverage that works for you.

"You always want to look at the trade-offs -- what do I save in premiums vs. how much risk do I take on?" Feldhaus says.

Another place to shave some money from the premium, says Hungelmann: personal injury protection, also known as medical payments coverage. If you already have health insurance for yourself and your family, that would cover your medical bills after an accident, he says.

Some states mandate some medical payments coverage, but if you have health coverage, "don't buy any more than you have to," says Hungelmann.

2. Don't just consider your total liability. Many insurance policies specify that the company will pay up to $300,000 in total liability coverage if you are found liable for an accident, but only $100,000 for each person injured. That means if you are at fault in an accident that leaves one person with a $200,000 lawsuit, you will be on the hook for half, even though you thought you had $300,000 worth of coverage.

Instead, says Hungelmann, have your agent write the policy so that the total amount paid per accident and per person are the same. That way $300,000 in coverage means $300,000 in coverage, no matter how you divide it.

3. Consider buying an umbrella policy. If you have considerable assets or are likely to have them in the future, consider an umbrella policy that would cover your home and auto. Umbrella policies usually start at $200 to $300 a year for up to $1 million worth of coverage.

4. Seek out good advice. If you're shopping for an agent, ask about experience. In many places, agents need only a week of training before they can sell insurance, says Hungelmann. His recommendation is to seek out a pro who has gone back to school to earn industry credentials. Designations to look for include: CPCU, or Chartered Property Casualty Underwriters, which requires about 1,000 hours of extra classes; CIC, or Certified Insurance Counselor, which requires about 100 extra hours; and the AAI, or Accredited Adviser in Insurance, which also requires about 100 hours of study.

5. Keep a good credit rating. Many insurance companies use your credit rating to determine whether to insure you and how much to charge.

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