2008 Insurance Guide
20 things to know about auto insurance

10. If your teen is away, notify your insurance. According to industry professionals, teen drivers add anywhere from 50 percent to 500 percent to a premium. However, many insurance companies will discount the rate when a child is away at school. Check yours.

Another option is even cheaper, but also more risky. If children are going to school more than 100 miles from home, you can take them off the policy and save a serious chunk of money, according to Loretta Worters, vice president with the Insurance Information Institute, an industry organization. Two caveats: The kids can't drive at school unless they get their own insurance, and if they come home for a break, don't loan them the car.

11. Do the math before dropping collision. This is one of those cost-saving concepts where getting a good deal means running the numbers and making sure it meets your gut-check test. If you are driving a 12-year-old car worth $2,000 and the car is totaled, the most you'll get from the insurance company is roughly $2,000. Would you rather bank the money you're paying in collision insurance toward a new car? The critical questions to ask: How much of your premium is collision insurance? And could you lay your hands on $2,000 if you needed a new car tomorrow?

12. Shop service, as well as price. The real question with insurance is how does the company treat you when you file a claim?

"Some companies view the policy holder as a member rather than sort of an enemy, and will help you get a claim settled at a reasonable amount (of time), and some don't," says Hunter.

Your state insurance department and the National Association of Insurance Commissioners keep records of the number of complaints and will share the information. And the NAIC Web site has complaint ratios, so you can actually compare the service records of various companies, says Hunter.

You can also ask friends and family what kind of experience they've had with claims with various companies, says Luedke.

After a major claim, a good agent will also act as a coach, says Hungelmann, advising you on the way to present the best case to the adjuster and helping you in a dispute if the adjuster makes a bad call. With an Internet-based company or one you can reach only through an 800-number, you may sacrifice personal service just when you need it most.

Another smart strategy is to make sure the company has the financial resources to honor its promises. You can also check with companies like A.M. Best Company Inc. and Standard & Poor's Insurance Ratings Service  to research a company's financial solvency. Cheap coverage does you no good if the company takes your premium and folds.

13. Understand the claims process before you buy. Have your agent walk you through the claims process upfront. Will your insurance pay for brand-name or generic parts to fix your car after an accident? Will you be limited in your choice of mechanics or body shops? If the language in your contract is unclear, have your agent put anything you don't understand in writing.

14. Ask about 'diminished value'. This is a hot button in the insurance industry, and the subject of many lawsuits. The big debate: Is a car worth less after an accident? If so, should the insurance company have to fix the car and pay you the difference? Ask your agent and call your state insurance department to find out about current regulations and rulings.


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