Things to know Before Doing Car Insurance

When it comes to picking car insurance, sometimes it's just easiest to go with what your friends use, or the company whose commercial you've seen the most on TV lately. But that's probably not the best idea. Like any business, insurance companies all have different rates, plus they can vary greatly in everything from their coverage to their office hours to the speed of their claims service. So, shopping around is essential to getting a good deal, and the proper coverage and service for you. But don't walk into the process blindly. You have to know what questions to ask when you're shopping around, because not every agent you speak with will give you in-depth info on their coverage and all of your options. The good ones will do that, but the not-so-good agents will only cover the basics. It's up to you to ask a wide range of questions so you can truly compare plans.
If you're like most people, though, you're not an expert and don't even know what you need to know about insurance (how's that for confusing?). Keeping the following list of 10 questions close by can keep you on track while researching insurance companies and will help you choose the policy that's right for you.

For starters, you have to purchase any coverage mandated by your state. Most states only require liability insurance, which covers the costs of anyone who's injured or dies as a result of a car crash you caused, plus damage to their vehicle, any property damage and legal fees. But consider these additional types of coverage as well:

• Collision. This covers repairs to your car after an accident, no matter whose fault it was. You generally have to pony up for the deductible, which is a set amount of money you agreed to pay before the insurance company kicks in the remainder. Collision coverage is important -- but only if your car is newer. Let's say you have an older car worth $3,000 and collision coverage that costs $200 per year with a $1,000 deductible. If your car gets totaled, you'd collect $2,000 after paying the $1,000 deductible. That's not a great payback. But if you have a newer car worth $30,000, you'd collect $29,000 after paying the $1,000 deductible. That's more like it!
• Comprehensive. Comprehensive pays for damage to your vehicle from non-crash incidents, such as fire, vandalism, acts of nature and theft. This coverage normally carries a deductible, too. As with collision coverage, whether or not it's wise to purchase comprehensive depends on the value of your car; you can find out what that value is by looking at an online guide such as the NADA Guides at www.nadaguides.com. Check your vehicle's value every year and re-evaluate your collision and comprehensive coverage [source: Zeman].
• Uninsured and underinsured motorist protection. Also called UM and UIM, these coverages may be required by your state. Less expensive than collision and comprehensive, UM and UIM cover the costs of car repairs if an uninsured or underinsured driver hits you. There's no deductible, but there's also typically a limit on how much you'll be able to collect -- generally about $3,500 [source: Zeman].
• Personal injury protection. This coverage pays for medical expenses and lost wages to you or your passengers if someone hits you. If you're injured while riding in someone else's car, it will also cover those medical bills. This is pretty important coverage to carry, although if you're healthy and have a disability policy, you can opt for the minimum coverage