Are You Getting the Coverage You Need?

By Tom Ripley

We are dead in the middle of peak months for purchasing new cars, and that means millions of consumers are in the market to buy. By doing your homework -- comparison shopping and reviewing new car guides -- smart shoppers can find the best cars to suit their needs. But you might be in for an ugly (and expensive) shock if you fail to take the time to find the right insurance to protect your new wheels.
 
"Take a few minutes to ensure that you truly have the auto insurance you need," said Bob Smith, vice president and chief claim officer of MetLife Auto & Home. "Surprisingly, a new car depreciates up to 30 percent during the first year, and many insurers will take a deduction for depreciation during this time. That means that a person could pay $20,000 for a vehicle, but only receive $14,000 if it were 'totaled' due to a loss a few days later. By asking the right questions, however, you can avoid some nasty surprises, and also, find ways to save money on the insurance you're purchasing."
 
Many consumers think of insurance as a commodity, but all policies are not the same. To avoid coverage gaps and take advantage of all possible discounts, consumers should ask the questions before purchasing insurance for a new vehicle, and here are some good ones:
 
What does my auto coverage actually cover?

Determine in advance the level of protection actually afforded under the terms of the policy. For example, if your new car were damaged beyond repair, would your auto insurer replace the vehicle with a new one or would the company take the above-described deduction for depreciation?  The difference in value can run into the thousands of dollars.

Is image everything?

Certain cars look great and catch the eye, but you may end up paying more for the flair they offer if that flair also attracts thieves and lowlifes. Cars that are expensive to repair or have historically higher theft rates carry higher insurance costs. Specialty vehicles and sports cars typically cost more to insure, too.
 
Can I use my car's equipment to my advantage?

If your new vehicle comes equipped with such things as anti-theft alarm devices or anti-lock brakes, you may qualify for discounts.  Be certain your insurance representative is aware of all the anti-theft and safety equipment your car has.

Are there other discounts for which I qualify?

Insurers offer discounts for a number of factors, including driving record, safe driving courses, the number of drivers using the vehicle, low annual mileage, and whether the vehicle is kept in a garage overnight or parked on the street. Interestingly, in the event of a loss, only a few insurance companies will reward customers for good driving habits by reducing deductibles for each year of loss-free driving. Make sure to ask whether your company offers such a reward, and if so, whether you have to pay extra for this feature.

Do you want fries with that?

While it doesn't have anything to do with car insurance, this is a good all-around question to ask in most circumstances because many people do want fries and somehow, in the confusion, forget to ask.

More information on car insurance (but not about fries) is available in a free brochure called "Shopping for a Safer Car." This 20-page booklet outlines safety factors that should be considered to reduce the risk of death or serious injury in the event of a crash. Coauthored by MetLife and the Insurance Institute for Highway Safety, it is available by calling 1-800-638-5433 (MET-LIFE).

Born in Boston, Driving Today Contributing Editor Tom Ripley now resides in Villeperce, France, where he reports on the human condition and frequently orders pommes frites.

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