A Total Loss???

You're OK. Your kids are OK. You have much to be thankful for.
As for your car, well, there's not a lot left. The last time you saw it, it was being hoisted heavenward with two limp, deflated airbags dangling from the dashboard and broken glass littering the footwells. The front-end sheet metal resembled a rice-paper lampshade after a cross-country move. Questions start filling your head. Will you ever see it again? Should you start looking for a replacement? And at this point in time, is your auto insurance company a friend or foe? What if your car is rare or collectible? The following step-by-step guide helps answer these questions and more to help you survive the scrutiny of your car insurance company after you've survived a serious accident.
Step 1: Brush up on your car insurance policy, before an accident occurs.
Most of us know generally what kind of car insurance coverage we have — liability, comprehensive and collision, for instance. However, when it comes to the fine print, there are terms about which most of us have absolutely no clue (but that are sure to surface when it comes time for your insurer to shell out cash to repair or replace your damaged vehicle). So in order to make sure you are dealt a fair hand when the dust settles, sit down with your agent and learn what those big terms in the small font really mean. We advise doing this before a serious accident occurs, particularly since insurance agents tend to be far more pleasant to deal with when they're not in the middle of a messy claim.
If, however, you're reading this in the aftermath of a bad accident, it's crucial that you understand what you're entitled to moving forward. So when you're done reading this article, bite the bullet and talk to your agent about exactly what your policy covers (not just in relation to this accident, but everything else, too). And bring cookies.
Step 2: Get moving again.
If you have rental car coverage, rent the best car your coverage allows and get moving again. Having a rental car will at least help keep the rest of your life from falling apart while you get this matter settled. Depending on your coverage, you may not get as nice a rental as what you actually own, but at least you won't be stranded at home or burdening your friends and neighbors for rides while you deal with repairing or replacing your car.
Talk to your agent before you rent a vehicle, because you may still be liable for collision damage to the rental car as well. Policies vary in the way they cover this, so check the language of your policy before renting a car.
Step 3: Check your state's department of insurance for a list of your rights as an insured driver.
Every state regulates its car insurance companies to some degree in order to protect its citizens from being shortchanged or cheated after filing a claim. Some states are more closely involved with this process than others, so log on to your state's governmental Web site and search for its department of insurance to find more information regarding the fair settlement of insurance claims. You will often find a bounty of helpful information that will guide you as you move forward in this arduous task.
Step 4: Find out how much your car was worth before the accident.
Claims adjustors from your car insurance company use a combination of dealer surveys, value guide books, online pricing sites and actual private party sales to determine your car's actual cash value (ACV). They also factor in things like sales tax, registration and title costs of a replacement vehicle to determine this amount. Proprietary as they are, these determinants can vary from company to company and state to state. Ultimately, then, what one company comes up with may not match what another may find, or even what you'll come up with on your own, using consumer Web sites like Edmunds.com.
A bit of advice, then: don't just take their word for your car's ACV. Involve yourself in the evaluation process. Do some research on your own, because the higher your car's ACV, the bigger your check is going to be if they determine it's been totaled. A valuable tool for establishing the worth of your car is Edmunds' True Market Value Appraiser. The appraiser will adjust to price based on condition level, region, mileage and options. In some instances, such as if you have a particularly rare trim level, color combination or special edition of a vehicle, you may know without a doubt that your car is worth more than what the insurance company tells you. Don't be afraid to present your case and ask them to make an adjustment — if your argument is sound, companies will probably listen to you. In fact, your insurer is required by law to give you a fair price, and they won't want to fight you in court if it looks like you could win. But you may have to do the extra legwork of finding an independent appraiser and/or compiling research on your specific car to bolster your case.
Step 5: Agree upon a fair evaluation of the damage.
Auto insurance companies must do a visual evaluation of the damage to your vehicle to begin estimating the cost of repairs. It helps to be there with them when they survey the damage, so that you can point out anything they may overlook. Make sure that they see all damage in order to ensure a proper settlement.
Keep in mind, however, that the more damage they see, the more likely it is that your car will be declared a "total loss." Here's where it gets hairy, since, depending on how much you love or hate your car, the concept of total loss can be a bad or good thing. First, a definition of the term "total loss."
According to the Insurance Consumer Advocacy Network (I-CAN), a self-help Web site for consumers run by a former insurance adjustor, insurance companies define a "total loss" as:
"The cost of repair plus projected supplements plus projected diminished resale value plus rental reimbursement expense exceeds the cost of buying the damaged vehicle at its preaccident value, minus the proceeds of selling the damaged vehicle for salvage."
Huh? Simply stated, if compensating you for repairing the car, renting something in the meantime and paying you what your car has lost in value costs more than what they'd shell out to just buy you a replacement and then sell your wreck to a salvage yard, you're not going to get your car back, but a check instead.
If the estimate your insurer comes up with is questionable to you, check your policy for an "Appraisal Provision" that would allow you to get an independent appraisal of the damage, which would then be reviewed by an "umpire" jointly selected by your appraiser and that of your auto insurance company. If the two appraisers can't agree on an amount of your car's ACV and damage, the umpire steps in, basically to take one side or the other to help resolve the issue. While you have to pay for your appraiser, and share the umpire's fee, it may be worth the expense if you really feel that your auto insurance company is trying to give you short shrift.
However, given the sizable expense of fixing a damaged car, compensating you for lost resale value, rental car costs and so on, it's easy to understand why insurance companies often throw up their hands long before the repair bill exceeds the car's ACV. For example, some companies consider a wrecked vehicle a total loss when the total cost to repair it exceeds just 51 percent of the vehicle's ACV. Others don't give up until the repair bill hits the 80-percent mark.
This explains how a company can send an older car to the scrap yard after a minor fender bender, then turn around and call for a very damaged late-model vehicle to undergo extensive surgery. It can be helpful to know beforehand how your company deals with this kind of thing, even though it may not change the outcome of a claim in the long run. This way, at least you're not in for a shock when they come back and tell you ol' Bessie the Buick's not coming home. Also, be sure to ask how your auto insurance company deals with any aftermarket additions, such as custom wheels, that you may have installed on your car.
Step 6: Decide if you want the car back.
After a really serious accident, many people are inclined to go ahead and find a comparable replacement (or even take the opportunity to upgrade to a nicer car) rather than get their car fixed, since repairs sometimes cannot return it to its original quality. And even if a car can be repaired to "like new" condition, it will still have lost a significant portion of its resale value simply because it has been in a major accident (you can sometimes get back some of this lost value if you file a diminished value claim). Further, a new car can also make it easier for a family to move on psychologically after a traumatic experience like a serious accident.
But if your sentimental attachment to your car is so strong that you just can't imagine life without it, you can take the money and apply it to repairing her on your own, which, depending on the extent of the damage, could get quite expensive. Furthermore, the check your insurance company cuts you will be reduced by the amount it feels it would have gotten from the salvage yard, a check that's already been reduced by your deductible, whatever that is. So if ol' Bessie is, say, a 14-year-old Le Sabre, that's going to leave you with a pretty small check. You also may have to file a salvage title with the DMV.
That said, consider this little bit of irony: a car's "total" value is almost always less than the sum of its parts — literally. Indeed, parts are what salvage yards are interested in, since they make their money by selling what's left of your car, piece by piece. If you are likewise inclined to sell it off for parts, you may actually make money. But keep in mind that you will have to arrange for the legal dismantling, advertising and sale of those parts on your own. Not to mention the fact that the rusting, rotting carcass of your old car will be living somewhere on your property for the foreseeable future. And even if you're OK with that, consider also that dead old cars become dangerous playpens that neighborhood kids find hard to resist. Need we say more?
In any case, if you want to hold on to a car that's been considered totaled, inform your agent as early as possible in the process, since the longer you wait, the closer your car gets to being auctioned off to the highest bidder at the salvage yard.
Step 7: Move on: get your car repaired or get it replaced.
Depending on how long your rental car agreement provides you with transportation, you may have to start looking for a replacement car very soon if you car has been totaled. It may behoove you to be thinking about that even before the auto insurance company has determined whether it will repair your car, or how large a check it will write you.
Remember also that if your car has been totaled, your settlement must include taxes, title and license fee for a comparable replacement. Likewise, the settlement must make clear the value of any deductions taken on account of salvage matters if you're keeping your totaled car.
One final bit of advice: If your vehicle was not totaled, do not let the auto insurance company dictate which repair shop you use. They can make recommendations, sure, but definitely find out why they recommend a particular shop. Compare their recommendations to those you get from friends and colleagues.
Dealing with car insurance matters after an accident is no fun. Just keep in mind that the sooner you take care of all of this, the sooner you and your family can put this whole thing behind you.

How to Choose the Right Insurance Company

If you've read our "10 Steps to Buying Insurance" article, you should have a pretty good idea of how much car insurance to buy and how to find a low-cost policy. But how do you make sure that the company you sign on with is going to be reliable? When we say "reliable," we're talking about how the insurer treats you, the customer. Most importantly, how will the company deal with you when you file a claim?
To help answer this question, we consulted two insurance experts: Dennis Howard, director of the Insurance Consumer Advocate Network (I-CAN) and a retired insurance adjuster, and Doug Heller, a consumer advocate at The Foundation for Taxpayer & Consumer Rights, a California-based consumer advocacy group. Both had several ideas for consumers determined to make sure their car insurance investment is directed toward a trustworthy company, one that will pay on time and in full.
1) Visit your state's department of insurance Web site. Although you may not be familiar with it, your state, and every state, has a department of insurance. Most departments have Web sites, and many publish "consumer complaint ratios" for all of the insurance companies that sell policies in their state. This ratio tells you how many complaints a car insurance company received per 1,000 claims filed.
Both experts recommended that consumers use complaint ratios to screen prospective insurers. "Just because they're a big name doesn't mean that they'll be a 'good neighbor' or that you'll be 'in their hands,'" Heller noted.
If you've done your homework, you should already have a list of car insurance companies with the lowest premium quotes. Now jot down the companies with the lowest (or best) complaint ratios. Then, compare your two lists — the companies that rank best on both lists merit your strongest consideration.
If you can't find complaint ratios for your state, Heller recommends examining the complaint ratios published by other states. Keep in mind that a single insurance company's practices can vary significantly from state to state — a subpar ratio in one state doesn't necessarily mean the situation is the same in your state. But watch for general trends. If an insurer is getting a lot of complaints in several other states, you probably don't want to get involved with this company. The I-CAN Web site provides links and contact information for every state's department of insurance.
Also note that insurance department Web sites often provide basic rate comparison surveys. These can give you a rough idea of which insurers might interest you on a financial basis without the hassle of typing in all your personal information (as you must when you use one of the online quote sites).
2) Find out which insurers body shops recommend. One of the best ways to identify reliable insurers, according to Howard, is to contact local body shops that you trust and ask for their recommendations. Body shop managers have a unique perspective to offer, since they regularly interact with insurance adjusters. They know which companies have the smoothest claim processes, which affects how quickly the work can be completed on a damaged vehicle. And they know which companies are pushing aftermarket parts, in lieu of genuine original equipment manufacturer (OEM) parts, to cut costs.
3) Check the J.D. Power Ratings. J.D. Power and Associates collects data from individual policyholders nationwide and rates them according to coverage options, price, claims handling, satisfaction with company representatives and the overall experience. A quick visit to the J.D. Power Consumer Center will give you a feel for how the major carriers stack up. J.D. Power also publishes an annual survey of major auto insurers — Amica and Erie have finished at the top for the last three years. These are also companies that Howard recommends: "Erie is sold by independent agents, who are very knowledgeable about the product. I like their claims handling approach. Almost all other companies look at a claim and find a way to not pay it. Erie and Amica will look at it and try to find a way to cover it."
4) Consider insurers' financial strength ratings. As a final check, you can take a look at the A.M. Best and Standard & Poor's ratings. Both companies publish financial strength ratings for all insurance companies — these "measure" an insurance company's ability to pay out a claim (they have nothing to do with the way a company treats its customers).
For the general consumer, looking up these ratings is only a formality, since most of the well-known carriers are going to be a safe bet. Moreover, independent agents would be unlikely to recommend a company with dubious financial standing. Still, if you're considering a smaller, unfamiliar insurance carrier, you might consider this research time well spent. Insurance companies often provide this information on their Web sites, but if not, you can run a search at the A.M. Best and Standard & Poor's sites.
The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company's solvency), F (in liquidation) and S (suspended). In any case, you should only work with companies that have at least a B+ rating.
The Standard & Poor's ratings range from AAA (the highest) to CC. Additionally, some companies receive ratings of R (under regulatory supervision) and NR, which means "not rated." The letter grades might be modified by a plus or minus mark. Consider only those companies that have at least a BBB rating.
5) Still confused? Consider working with an agent. It used to be that everyone purchased auto insurance from an agent, but now, car insurance companies like Esurance, Geico and others allow you to purchase insurance directly — over the phone from a customer service representative or online. Still, many of the major players have preserved their national networks of local agents — even if you use State Farm's or Allstate's Web site, you will still be assigned a local agent.
There are two kinds of agents:

• a) the captive agent, who represents only one insurance company (major carriers like AAA, Allstate and State Farm sell policies through captive agents).
• b) the independent agent, also known as a broker, who represents several insurance companies and therefore does not have a vested interest in selling you a policy from one particular company.

The main advantage in having your own agent is that this person has a vested interest in keeping you happy. Accordingly, he can become familiar with your situation and guide you toward a suitable policy. Howard favors the use of agents and advised, "Don't rule out direct providers, but my personal preference is to have an agent, preferably an independent agent, write your policy for you.... An independent agent would become aware of less advantageous conditions with one company [and help you move to another]. You can change carriers without changing your agent. I encourage consumers to develop a relationship with their agent."
The prospect of good working relations with an agent may help you to make a decision: When Heller purchased auto insurance for the first time, two insurers gave him similar quotes, but he went for the slightly higher one because the agent had been highly recommended by a friend. "You shouldn't go direct without always checking out other options," he said.
But, he cautioned, "Never feel pressured by a broker or an agent. Take the time to talk with an agent or a broker as well as do your online research. You may not need an agent — you may find a better deal with a company that operates direct."
Independent agents sometimes charge a fee for their services, but you may be able to negotiate that. You should agree upon any fee in writing before making a purchase. Look for agents who are certified by Independent Insurance Agents of America (Big "I") or Professional Insurance Agents (PIA).
Of course, we know you have better things to do with your time than think about car insurance. Realistically, most people won't be able to do everything on this list before choosing an insurance carrier. But if you feel that you've been burned during the claims process in the past, consider at least one or two of these suggestions — you'll thank yourself if you're ever involved in another accident.

Young Drivers, Marijuana and Car Insurance

Marijuana, young drivers and serious car accidents are on a collision course. Fatal crashes involving drivers whose systems showed evidence of THC, the active ingredient in marijuana, nearly tripled in 10 years, rising from 4.2 percent in 1999 to 12.2 percent in 2010, according to a study released earlier this year by Columbia University's Mailman School of Public Health. In another four-year study, 43 percent of fatally injured drivers under 24 tested positive for cannabinoids. The percentage was lower for older age groups.
Now that marijuana is legal in Colorado and Washington and widely tolerated elsewhere in the U.S., parents may be on their own collision course with pot: They face steep car insurance hikes and even cancellation if young drivers on their policies are convicted of a DUI stemming from marijuana use. Here's what parents need to know about drugged driving and the effect it can have on insurance coverage.
Drugged Driving: A Growing Concern
Pot use behind the wheel is a subset of a category that law enforcement and the traffic safety community call drugged driving. Every state has laws addressing it. In many, the laws say if a driver is stopped and authorities can prove the individual drove under the influence of any substance that impairs driving ability, he or she could be convicted of a DUI. Nearly one-third of states feature "per se" laws. These more strict laws say that any amount of a controlled substance found in the driver's body is evidence of impaired driving.
The hazards of drunken driving are well known. A growing concern among researchers, law enforcement and those in the traffic safety community is the destruction wreaked by individuals driving under the influence of drugs including marijuana, cocaine and prescription and over-the-counter drugs. Conservative estimates put the cost of these accidents at 6,700 deaths and nearly $60 billion in costs each year.
The effects of marijuana use on driving vary from one person to the next. In the words of the National Highway Traffic Safety Administration (NHTSA), "It is difficult to establish a relationship between a person's THC blood or plasma concentration and performance impairing effects." Concentrations of the drug are "very dependent on patterns of use as well as dose."
Insurance Follows the Car
Driving while stoned is a serious matter for teen and twenty-something drivers, who risk death, injury, criminal prosecution and civil lawsuits. In addition to those outcomes, drugged driving also can have financial impacts on parents, who often own and insure the cars their adult children drive.
"Insurance follows the car, not the driver," says Loretta Worters, vice president of communications for the Insurance Information Institute, a national insurance trade association. A young person's drugged-driving conviction is likely to be treated like a drunk driving conviction, whether the recreational use of pot is legal in that state, says Bob Passmore, personal lines policy senior director with the Property Casualty Insurers Association of America.
"As with any DUI conviction, your insurance company could cancel your policy, ask you to take the individual off the policy, or keep him or her on at a much higher rate, depending on the rules in the state," Passmore says. "The individual with the conviction might need to get their own policy." That would come at a much higher rate than if the driver is on his parents' policy, he says.
Worters agrees. If a young person is convicted of driving under the influence, "insurance rates will jump astronomically, because driving under the influence is illegal," she says. "DUI convictions can result in multi-year jail terms. You're also putting the parents' assets at risk" if there are civil lawsuits in connection with the accident, she warns.
Not every teen uses pot, of course. In 2012, less than 8 percent of youths ages 12-17 had used marijuana in the past month, according to the 2012 National Survey on Drug Use & Health. And about 80 percent of teens say they disapprove of their friends using pot. Pot use increases markedly for young adults, however. In 2012, 18.7 percent of 18-to-25-year-olds had used marijuana in the past month.
If your child does use pot, you may need to take a tough stance when it comes to his or her use of your cars.
"Parents may want to consider either taking the car privileges away until they've cleaned up their act, or taking them off your insurance policy," Worters says. An insurance company may not be comfortable with a young driver continuing to be on the policy if they're "living in the same house, having possible access to the keys, even if they aren't driving," she says, "because that risk is always there."
Talk to Your Insurance Agent
Parents should consider contacting their insurance agent to assess their coverage, preferably before a teen drives under their car insurance policy, experts says. Parents also might want to review their liability limits and consider an umbrella liability policy. This will provide protection in case their child causes a serious injury and is sued.
"You want to make sure you and your child are protected," Passmore says.

How To Cut Teen Insurance Rates

Teens ages 16-19 are three times more likely than drivers older than 20 to be involved in a fatal crash (or any crash, for that matter) according to the Insurance Institute for Highway Safety. It's not too surprising, then, that teen drivers tend to have high insurance premiums. For parents, this can mean a big jump in insurance premiums once you add your teen driver to your policy. However, there are ways to reduce your costs right out of the gate, even for very inexperienced drivers. Here are some ways to keep policy costs at a minimum.
Choose the Right Car
It's simply a matter of economics. There are some cars that cost more to repair and replace than others. There are also some cars that are more likely to be stolen and others that protect passengers better in a crash. Combined, these three characteristics have a lot to do with how much you'll pay for the collision and theft portions of your policy, says David Goldstein, the author of Insure Your Car for Less: A Practical Guide to Saving Money on Automobile Insurance.
There are several ways to choose the least expensive car to drive. First, check the Insurance Institute for Highway Safety's Top Safety Pick awards and the National Highway Traffic Safety Administration's 5-Star Safety Ratings to see which cars scored the best in crashworthiness. You'll also want to check the National Insurance Crime Bureau's list of Hot Wheels: cars that are most commonly stolen.
Your insurance broker or company can also help you find the best rate for the cars you're considering, says Goldstein, who has worked as an insurance and claims adjuster. "If you're considering several cars, call and ask for a rate quote on each," he suggests.
Midsize family cars are generally the cheapest to insure, says Jeanne Salvatore, senior vice president and chief communications officer at the Insurance Information Institute, a nonprofit information service. "You want a car that's easy to drive and highly protective. Those are the cars that are going to keep your teen safe and cost the least to insure," she says.
You may also want to consider a car that doesn't need collision insurance, which will cut your rates considerably, says Salvatore, and either way, the age of your car may lead to more discounts.
"Some companies offer a utility discount for cars older than a 2002 model year," she says. That said, make sure any older car you purchase has a solid crash rating and all of the safety features that a newer car might have including airbags, an antilock braking system (ABS), daytime running lights and (for SUVs) electronic stability control.
Adjust Driver Assignments
When you call the insurance company to add your child to a policy, the representative will ask you to designate which car will be driven by each member of your family most often.
You can save money by designating and having your child drive the car that's the least expensive to insure. The trick is finding out which car that is, says Goldstein. "Driver assignment can really affect your rates," he agrees.
If you get someone on the phone who is willing to work with you, he or she can take you through all the different scenarios. "Occasionally, I'd quote rates for four people and four different cars: two parents and two kids. If we played around with it, we could often save money," Goldstein says.
Look for Alumni Discounts or Resident-Student Discounts
One of the perks of going to college is that many schools ink alumni deals with large organizations, such as insurance companies. While the discount is usually around 5 or 10 percent, it's still worth looking into. Geico, for instance, offers an 8 percent discount for DePaul University students and alumni. Liberty Mutual offers special rates to those who attend Arizona State University.
If your child goes away to college and doesn't take a car along, you can save a lot on your premium. Allstate, for example, offers a 35 percent discount off premiums for students who live at a school that is more than 100 miles from where their car is garaged. "There's an assumption that they are only going to be driving on weekends and school vacations," says Salvatore.
Finally, all full-time high school and college students who get good grades can benefit from their diligence. Most companies offer up to 25 percent discounts for good report cards. You'll also see rates drop as your child advances in school. Seniors in college have better rates than freshman, so if your child takes college credits over the summer or in high school, let your insurance company know when he or she reaches the next college milestone, says Goldstein.
Wait an Extra Year Before Licensing
Some teens may not like this idea, but you can save a lot of money simply by having your son or daughter wait an extra year to get a driving permit.
"Wait until they are as old as possible before they get their permit," says Goldstein. "For instance, in some states you can get your learner's permit as early as 16 but you're probably not going to be driving [without restrictions] until you're 18. Why pay for insurance those two years unless you have to?"
Delaying the process is more common than you may think, according to several recent studies. The AAA Foundation for Traffic Safety reports that just 44 percent of teens get their licenses within 12 months of the minimum age and only 54 percent get their licenses before they turn 18.
However, if you go this route, make sure teens know that they'll still need the practice and supervision that a graduated driver licensing program affords.
Tracking for Discounts and Better Driving Habits
In recent years new devices that connect to a car's computer and use GPS technology to track driving habits and routes have flooded the market. While they can be very useful for parents who want to make sure that their teen isn't speeding or driving outside an approved area, they're also being used by insurance companies to help set rates for drivers of all ages in an approach called use-based insurance.
Snapshot, a program by Progressive Insurance, is one such option that uses a pocket-size telematics device that transmits car data using cell-phone technology. The device plugs into a car's onboard diagnostic port and measures driving habits such as how and when someone drives, tracking behaviors like mileage, time of day and if the person performs hard braking maneuvers.
"Our Snapshot program gives all consumers, including teens, more control over their car insurance costs by offering personalized discounts based on their actual driving behavior," explains Jeff Sibel, a spokesman for Progressive Insurance. "People who drive less, in safer ways and during safer times of day are most likely to receive a discount."
Some companies are offering the device for parental tracking, but without an immediate insurance discount. Its use could result in lower rates going forward, says Rebecca Hirsch, a spokeswoman for insurer USAA. "We're offering the device for free and parents get the monitoring for a year free," she says. "Parents can get text messages if their teens are doing things like hard braking. It enables the parent and the teen to have a conversation around safe driving habits. The first few years are so critical. Anecdotally, we've seen that the devices help build better driving behaviors."
Take a Class
Adults and teens alike can save money by taking a six-hour driving safety course either online or in person. Some insurance companies are offering teen-specific courses that can help reduce the number of crashes that involve teens by providing realistic driving simulations.
Liberty Mutual, for example, offers something it calls teenSMART, a program that focuses on the six factors that most commonly cause teen car accidents. The company says teens who complete the program may get "special savings" on their auto policies, but doesn't offer any examples of what those savings might be.
State Farm offers a program called Steer Clear for drivers under the age of 25 or new drivers with less than three years of driving experience. It requires drivers to watch a video, sign a safe driving parent/driver agreement and complete a certain number of supervised trips of 15-30 minutes over the course of a month, filling out a log after each trip. By completing the program, drivers can get a discount of up to 15 percent on their coverage, says State Farm spokeswoman Rachael Risinger.
Finally, driver-training classes — so-called driver's ed — can also help lower your premiums by up to 10 percent, depending on your insurer.
Make Smart Choices
Even if they apply every discount imaginable, most people will find there's no getting around the fact that rates will go up with a teen driver on the policy — at least for a little while. And while it might be tempting to simply "forget" to inform your insurance company that Junior has his license, take note: Doing so can have serious consequences if your child is in an accident.
You'll also want to make sure you have enough insurance coverage. "Don't go for the minimum limits," suggests Burl Daniel, a former insurance agent and corporate risk manager who testifies as an expert witness in insurance cases. "You're exposing yourself to potential problems, if your kid does have a wreck and seriously injures someone. Don't take the bait now just to save a few hundred dollars when it could end up costing you a lot down the road."

How To Replace Your Car After a Natural Disaster

The night Hurricane Sandy struck the East Coast, Mandee Bellarosa and her roommates were hunkered down in their multilevel condominium in Hoboken, New Jersey. At 9 pm, the power went out, and shortly afterward they went to bed.
Bellarosa woke just two hours later when a friend called with bad news. Water was already entering his garage, where she had earlier parked her 2009 Volkswagen Jetta, hoping to keep it out of harm's way. Despite the blackout, she could see that the streets below her windows were fast becoming rivers.
It wasn't until the following afternoon that the water had receded enough for Bellarosa to venture outside, and even then it was a knee-deep trudge to check on the status of her car. The Jetta actually looked OK, but when she opened the driver's door, water poured out.
Car shopping would probably be the last thing on your mind if you were caught in a natural disaster. But events like the 2011 earthquake and tsunami in Japan or this year's so-called Frankenstorm can destroy tens of thousands of cars in little more than the blink of an eye, leaving their owners no choice but to pick a replacement vehicle as they start to rebuild their lives.
Even a lesser calamity — a toppled oak or a deer leaping from a dark wood — can unexpectedly leave someone without wheels, while life continues forward at full speed.
In these situations, the last thing you want is any more stress or drama. With that in mind, here are a few basic strategies — from filing car insurance claims to car shopping — to get you back on the road as swiftly and painlessly as possible.
Determining if Your Car Insurance Covers Natural Disasters
You'll want to establish what's covered by your car insurance policy before making any big decisions. "If your car was damaged in [a storm like] Sandy, it is likely covered if you have comprehensive coverage as part of your auto insurance policy," says J. Robert Hunter, director of insurance for the Consumer Federation of America. Comprehensive coverage — which is sometimes known as "other than collision" insurance — "covers many things that could happen in a storm, including water or flood damage, falling objects including trees, signs and such, and wind damage," he says.
People with newer cars usually have this coverage. But Hunter also advises those with older cars, who may be thinking of dropping collision from their policies, to "keep the usually much less costly comprehensive coverage." It can be especially important if they live in areas prone to floods, high winds, earthquakes or other calamities.
"File your claim fast, as they are usually settled on a first-come, first-served basis," he advises. This is critically important after a widespread disaster like Sandy, since insurers can quickly become overwhelmed with claims. Bellarosa, for instance, has gone weeks without a final settlement for her totaled Jetta despite almost daily calls to her adjuster.
And if you don't have comprehensive coverage, check your homeowner's or renter's policy. In some cases, it may cover disaster-related damage to your car.
Depending on the scale of the natural disaster, you may also be eligible for assistance, typically in the form of a loan, from one of a number of state and federal agencies. Check DisasterAssistance.gov to see what help is available to replace your car.
Document Your Case
As soon as it's safe to do so, grab your camera or cell phone and snap some photos of the damage. Make sure to get shots from various angles — front, back, side, above and below — as well as pictures from inside the car, including the trunk and engine bay. Resist the urge to start cleaning up the mess immediately; it's best to get photos of the car as you found it. Clear evidence like this can help your insurance company understand the nature and extent of the damage — and whether it makes sense to attempt a repair.
Diana Dyckes, another Sandy victim from Hoboken, returned to her 2011 Subaru Legacy the day after the storm. Inside she found small ponds of floodwater in the cupholders and residue on the seats and roof lining. She snapped photos of what, to some, might appear to be light damage. But these signs of exposure to brackish water demonstrated to her insurer that the car was a total loss. Her later discovery of a flooded trunk and a failed ignition bore that out.
A car is typically declared a total loss if the anticipated costs of repairing it exceed approximately 70 percent of its estimated replacement value. Make sure your car is given its proper due in this equation by using an online appraisal tool like Edmunds.com's True Market Value (TMV)^®. The tool allows you to create your own estimate, which you can then compare to the amount determined by your insurer.
Remember that your car's specific odometer reading as well as its trim, options and condition all affect its value, so make sure that any estimates have accounted for these details correctly. If you happen to have any clear "before" photos of the car, maybe from that Sunday afternoon you spent washing and waxing it, these can help you verify the car's actual condition prior to the incident.
Stand Your Ground — and Escalate if Necessary
By following these steps, you may be pleasantly surprised at how easy it is to reach a comfortable settlement with your insurer. But that's not always the case, of course.
Hunter, a veteran of the insurance industry, recommends keeping a record of all interactions you have with your insurer after making a claim, including the date and time, the person you spoke with and what he or she told you. Having a detailed record of these conversations can come in handy if there are any issues with settling your claim.
Know that you aren't required to accept the first settlement offer you get, says Hunter. Ask the adjuster to be specific about how he or she determined the settlement amount. If it doesn't seem fair, make your case using the evidence you've gathered in the steps outlined above.
"If you still have trouble," says Hunter, "complain." And don't just ask for your adjuster's immediate supervisor. Talk instead to the claims office manager, who will likely be more motivated to wrap things up both quickly and to your satisfaction. If that doesn't work, push it a step further by seeking out the vice president or director of claims at the insurer's home office.
You can also file a complaint with the insurance commissioner's office in your home state. Most offices have online forms you can use to file the complaint along with your supporting documentation. Keep in mind, though, that resolution via this path usually takes longer than working directly with your insurer. The paperwork involved with settling complaints made to commissioners' offices is burdensome to insurers, so simply threatening to file one may by itself motivate your insurer to act in your favor.
If all else fails, your last resort is to contact an attorney. Insurance companies take legal action quite seriously, in part because of the public relations problems they have the potential to bring.
Ready, Set, Whoa
Let's say you're happy with your settlement and you've got a check in hand. All that's left now is to hit the dealership and buy your new car, right? Not so fast. Tempting as that may be, it's important to take your time and do the proper research beforehand, just as you would with a purchase under normal circumstances.
In fact, taking your time may be even more critical in the wake of a disaster. Edmunds.com analysts estimated that in the immediate aftermath of Sandy, the price of a used car in affected areas jumped as much as $1,000, due to damaged dealer stock as well as interruptions in the supply chain.
If you're in desperate need of a set of wheels, try borrowing a car from a friend, joining a carpool at work or signing up for a car-sharing plan like Zipcar. Or consider renting a car for a week or so while you navigate the purchase process. This expense can pay for itself and then some, since it buys you time to evaluate your options thoroughly and find the best possible deal.
Once you finally have a moment to think, check out our Car Buying Guide for top picks of new cars in every type and price range. Try the strategies outlined in our "Quick Guide to Buying a New Car" to streamline your purchase. If you know what you want, you can buy a new car in a day.
Folks shopping the used-car market should review Edmunds.com's Used Car Best Bets and our "Quick Guide to Buying a Used Car."
Also, in the aftermath of any widespread destruction, be wary of unscrupulous sellers who may be trying to unload flood-damaged cars. Telltale signs include stained carpets or upholstery, electrical glitches or musky odors. As always, if the deal seems too good to be true, it probably is.
Car Incentives to the Rescue?
Be aware that some manufacturers and dealers may be offering incentives specifically for disaster victims. Bellarosa, for instance, found an excellent deal while shopping to replace the Jetta she lost in Hurricane Sandy. She loved her old car but couldn't pass up the employee pricing and discounted financing that Nissan has offered to those within federally designated disaster and emergency areas. She now drives a brand-new Nissan Altima.
Other manufacturers offered similar deals, as well as relief plans for owners having trouble keeping up with their car payments in the weeks after the storm. Meanwhile, some dealerships in the area were advertising "hurricane pricing" as well as perks like on-site insurance adjusters or a free generator with every new car purchase.
Remember to research the details of a disaster-related incentive just as you would any other, using tools like Edmunds.com's car Incentives & Rebates page. It's important to stay informed. Bellarosa, for example, shopped carefully and left one dealership after being "steps away" from purchasing a car.
"The salesman was less than forthcoming about the deals that were available to me regarding Sandy when he knew from the beginning that was why I was in the market for a new car," she says.
Moving On
Both Bellarosa and Dyckes, who lost her Subaru to the storm surge, are moving on with their lives now. But they are not likely to forget Hurricane Sandy any time soon. Bellarosa is finally behind the wheel of a new car, but she still hasn't received an insurance check for the old one. Most recently, she found that a strongly worded e-mail to her adjuster garnered an apologetic reply — but still no specific details on her settlement.
Dyckes, on the other hand, received a swift settlement from her insurance company, the highly rated USAA. However, she has decided to forego replacing her car for now. "I take a ferry to work," she says of her daily trips into Manhattan. And on days off, whenever she's needed to get somewhere, she's been able to rely on public transportation or simply her own two feet.
In the future she may consider a car-sharing program where, when you've finished using the car, you can simply return it and walk away.
Coincidentally, her hometown of Hoboken offers just such a plan, called Corner Cars, in partnership with Hertz. Unfortunately, a number of their cars were also damaged in the storm.

10 Steps to Buying Auto Insurance

When it comes to auto insurance, you want to be adequately covered if you get in an accident, but you don't want to pay more than you have to. Unfortunately many people are doing just that, simply because they don't want to spend time shopping for car insurance. It's not inherently enjoyable, after all, despite how it looks in commercials featuring disgruntled cavemen and joke-cracking spokespeople.
But by doing some comparison shopping, you could save hundreds of dollars a year. When one of our editors used a rate-comparison service, he got basic coverage quotes for his two old cars that ranged from $1,006 to $1,807 — a difference of $801 a year. If you're paying thousands to your current insurance company because you have a couple tickets, an accident or an out-of-date and unfavorable credit rating, shopping your policy against others might be well worth the effort. Look at it this way: You can convert the money you save into buying something you've wanted or needed for a long time.
Step 1: Decide How Much Coverage You Need
To find the right auto insurance, start by figuring out the amount of coverage you need. This varies from state to state, so take a moment to find out what coverage is required where you live. You will find a list of each state's requirements and an explanation of the various types of insurance in "How Much Car Insurance Do You Need?" Also, check out "Little-Known but Important Car Insurance Issues," which has a glossary of basic insurance terminology. If you're a first-time driver and need a comprehensive overview of car insurance before you go on, review this guide from the National Association of Insurance Commissioners. Now you're ready to make a list of the different types of coverage you are considering.
Once you know what's required, you can decide what you need. Some people are quite cautious. They base their lives on worst-case scenarios and insurance companies love that. Insurance companies are in the risk business, and they know a policyholder's likelihood of being in an accident, as well as how likely it is for a car to be damaged or stolen. The insurance company crunches the information it has collected over decades into actuarial tables that give adjustors a quick look at the probability of just about any occurrence. You don't have those tools at your disposal, so your decision will depend on your own degree of comfort in assuming a certain level of risk.
Experts recommend that if you have a lot of assets, you should get enough liability coverage to protect them. Let's say you have $50,000 of bodily injury liability coverage but $100,000 in personal assets. If you're at fault in an accident, attorneys for the other party could go after you for the $50,000 in medical bills that aren't covered by your policy.
General recommendations for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (usually expressed in insurance shorthand as 50/100/25). Here again, let your financial situation be your guide. If you have no assets that an attorney can seek, don't buy coverage unnecessarily.
Your driving habits might also be a consideration in determining the coverage you need. If your past is filled with crumpled fenders, or if you have a lead foot, or if you make a long commute on a treacherous winding road every day, then you should get more complete coverage. Collision coverage pays for damage that your car experiences in an accident or damage from hitting an inanimate object (a tree, light post or fence, for example). Comprehensive coverage addresses damage that didn't occur in a collision — such as from fire, theft or flood. It also covers damaged windshields.
Keep in mind that you don't have to buy collision and comprehensive coverage. Let's say your vehicle is older, you have a good driving record and there is little likelihood that your car would be totaled in an accident, but a high likelihood of it being stolen. Then you could buy comprehensive coverage and skip the collision insurance.
Step 2: Review Your Current Insurance Policy
Read through your current policy or contact your auto insurance company to get the information you need. Jot down the amount of coverage you have now and how much you are paying for it. Take note of the yearly and monthly cost of your insurance, since many of your quotes will be given both ways. Now you have a figure to beat.
Step 3: Check Your Driving Record
You should know how many tickets you have had recently. If you can't remember how long that speeding ticket has been on your record, check with your state's department of motor vehicles. If a ticket or points you earned are about to disappear, thus improving your driving record, wait until that happens before you get quotes. Nothing drives up the price of insurance like a bad driving record.
Step 4: Solicit Competitive Quotes
Now it's time to start shopping. Set aside at least an hour for this task. Have at hand your current insurance policy, your driver license number and your vehicle registration. You can begin with online services. If you go to an online site to get a quote for an insurance rate, you can type in your information and begin to build a list of companies for comparative quotes. Keep in mind that not all insurance companies participate in these one-stop-shopping sites, however. If a recommendation from friends and family or other research points to a company that you think might be a winner, you can go directly to its Web site or call its toll-free number to get a quote.
Each quote form takes about 15 minutes each to complete. It might be well worth your time, since if the entire shopping process takes you two hours and you save $800, you're effectively earning $400 an hour.
When you use these sites, you might not get instant quotes. Some companies may contact you later by e-mail. Some that are not "direct providers" might put you in touch with a local agent, who will then calculate a quote for you. (A direct provider like Geico sells insurance policies directly to consumers. Other companies, such as State Farm, sell insurance through local agents.) 
Step 5: Gather Quotes and Company Information
While you're researching companies, take careful notes so you can easily make price and coverage comparisons. Keep a list of:

• Annual and monthly rates for the different types of coverage. Make sure to keep the coverage limits the same so you can make apples-to-apples comparisons for cost and coverage.
• The insurance company's 800 telephone number, so you can get answers to questions you couldn't find online.
• The insurance company's payment policy. When is the payment due? What kinds of payment plans are available? What happens if you're late in making a payment?
In later steps, you'll add some more information to this list.
Step 6: Work the Phones
Once you have gathered information online, it's time to work the phones. Contact those companies from which you haven't been able to get an online quote. Doing the research by phone can actually be easier and faster than on the Internet, provided you have your driver license and vehicle registration close at hand. When you get a quote over the phone, be sure to confirm the price by asking the representative to e-mail the quote to you.
Step 7: Look for Discounts
When you're making these calls and shopping online, make sure you explore all your options relating to discounts. Insurance companies give discounts for such things as a good driving record, your car's safety or security equipment and certain occupations or professional affiliations. Some companies are now offering lower rates if you enroll in "pay as you drive" plans. Some will give substantial discounts for young drivers in the family who have high grade-point averages. (You can use this as an incentive to your teen drivers and offer to share the savings with them.) Also consider using the same insurance company for home and auto policies. That will usually get you a better price. For more guidance on discounts, check out "How to Save Money on Car Insurance" and "Top 10 Ways To Lower Your Car Insurance Bill."
Step 8: Assess the Insurance Company's Track Record
You now have most of the price and coverage information that you need to make a decision. You can see which company's coverage is least expensive, but it's important to keep in mind that cheap isn't the only basis for choosing an insurer. How do you know which company is financially sound? How do you find out if an insurance company is going to treat you right — particularly in the event of a claim?
Here are some places to check to develop a clearer picture of an insurance company's track record for fairness, financial stability and customer service.
1. Use the National Association of Insurance Commissioners' Consumer Information Source to access information about insurance companies, including closed insurance complaints, licensing information and key financial data. You also can visit your state's department of insurance to check consumer complaint ratios and basic rate comparison surveys.
2. Consider contacting an independent insurance agent for additional information about a company.
3. Check out the financial strength ratings for an insurance company by referring to the ratings from A.M. Best and Standard & Poor's (registration may be required).
4. Review consumer satisfaction surveys from J.D. Power and Consumer Reports (subscription required).
5. Ask friends and family about their insurers and whether they're satisfied with them. In particular, ask them how their insurance companies treated them if they had a claim. Did they get fair, straightforward service? Or was it a hassle to get the matter resolved?
Step 9: Review the Policy Before You Sign
When you're done your research and zeroed in on a company, read over the main points of the policy. In addition to verifying that it contains the coverage you've requested and priced, it's a good idea to find out if the policy states that "new factory," "like kind and quality" or "aftermarket parts" may be used for body shop repairs, says Dennis Howard, director of the Insurance Consumer Advocate Network. If the policy has such a requirement, think hard about whether this is the company for you, particularly if you own a relatively new car that you plan to keep for a while. In this case, it's best to know at the outset that the insurer will pay for original manufacturer parts, rather than try to fight later, when you have a claim.
Step 10: Cancel Your Old Policy; Carry Your Proof
After you have secured the auto insurance policy you want, cancel coverage with your existing insurance company. If your state requires you to carry proof of insurance, make sure you put the card in your wallet or the glove compartment of your car.
Finally, here's a quick checklist to keep you on track:

• Determine your state's minimum insurance requirements.
• Consider your own financial situation in relation to the required insurance and consider whether you need to increase your limits to protect your assets.
• Review the status of your driving record — do you have any outstanding tickets or points on your driver license?
• Check your current coverage to find out how much you are paying.
• Get competing quotes from Internet insurance Web sites and individual companies of interest to you.
• Make follow-up phone calls to insurance companies to get additional information about coverage.
• Inquire about discounts.
• Evaluate the reliability of the insurance companies you're considering by visiting your state's insurance department Web site, reviewing consumer surveys and talking to family and friends.
• Review the policy before finalizing it. Remember to cancel your old policy.

How to Shop for Car Insurance

The word shopping brings a feeling of immediate excitement to most people. But if you combine the word shopping with car insurance — as in "shopping for car insurance" — it produces the opposite effect. The thought of shopping for auto insurance makes the eyes glaze over and the heart rate drop to the pace of a slumbering couch potato. Couch potato? Indeed. Doug Heller, a consumer advocate at The Foundation for Taxpayer & Consumer Rights (a California-based consumer advocacy group) and a recognized insurance issues specialist, told us that too often "people purchase insurance by calling the number on the screen."
But wait, this is important stuff! You want to be adequately covered if you get in an accident. And you certainly don't want to pay more for car insurance than you should. Maybe waiting for a solution to be beamed into your living room is not the best idea.
How can you stay awake while navigating through this murky subject? Just remember: There is money to be saved. How much? Hundreds, even thousands, per year. For example, one of the authors typed all of his insurance information into a comparative insurance service. The quotes (for very basic coverage on two old cars) ranged from $1,006 to $1,807 — a difference of $801 a year. If you're currently dumping thousands into your insurance company's coffers because of a couple of tickets, an accident or a questionable credit rating, shopping your policy against others may be well worth the effort.
Look at it this way — you can convert the money you save into the purchase of something you've lusted after for a long time. Hold that goal in your mind. Now, let's begin.
Before you can shop for something, you have to decide what you need. The first step in finding the right auto insurance for you is to figure out the amount of coverage you need. This varies from state to state. So take a moment to find out what coverage is required where you live. Make a list of the different types of coverage and then return for the next step. (You will find a list of each state's requirements and an explanation of the various types of insurance in "How Much Auto Insurance Do You Really Need?". Also, check out "Little-Known But Important Insurance Issues" as it has a glossary of basic insurance terminology.)
Now that you know what is required, you can decide what — if anything — you need in addition to that. Some people are quite cautious. They base their lives on worst-case scenarios. Insurance companies love these people. That's because insurance companies know what your chances are of being killed or maimed, and how likely it is for your car to be damaged or stolen. The information the insurance company has collected over previous decades is crunched into "actuarial tables" that give insurance adjustors a quick look at the probability of just about any occurrence.
It is important to keep in mind that the basis of insurance is a difference of opinion between you (the insured) and them (the insurance company). You believe you will, at some point, probably get in an auto accident. The car insurance company believes you probably won't. And the insurance company is willing to take your money to prove you wrong.
So how much auto insurance should you buy beyond your state's minimums?
"Look at your personal financial situation," Dennis Howard, director of the Insurance Consumer Advocate Network (I-CAN) and former insurance adjuster, advised. "If you have assets to protect — and that is all insurance is doing — get enough liability coverage." For instance, if you purchase $50,000 of bodily injury liability coverage but have $100,000 in assets, attorneys could go after your treasures in the event of an accident in which you're at-fault and the other party's medical bills exceed $50,000.
Howard noted that his general recommendation for liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25) given that half of the cars on the road are worth more than $20,000. Here again, though, let your financial situation be your guide. If you have no assets, don't buy excess coverage.
Another issue Howard mentioned is that the limits of any uninsured and/or underinsured motorist coverage that you purchase cannot exceed the limits of your liability coverage. Such coverage, he said, can be valuable, as it will cover lost income if you're out of work for several months after being injured in a major accident.
Your driving habits may also be a consideration. If your past is filled with crumpled fenders, if you have a lead foot or a long commute on a treacherous winding road, then you should get more comprehensive coverage.
"Consumers should also be aware that they don't have to buy the package [of collision and comprehensive coverage]," Howard said. "If your vehicle is older, if you have a good driving record and if there is a low likelihood that it would be totaled in an accident, but a high likelihood of it being stolen, you could buy comprehensive but not collision." Seems like good advice for all of the 1989 Toyota Camry owners reading this article — this has been the most stolen car in the nation for several years (it's often stolen for parts). But we would expect that most of them on the road have well over 100,000 miles.
At this time, a rather sobering point needs to be interjected. Just having car insurance doesn't protect you from absolutely anything bad that might happen. First, the insurance company needs to back up the claims that they make in the fine details of the contract. TV ads show folksy adjustors at the scenes of natural disasters passing out claims checks like coupons for cocktail wieners at a supermarket. But, in case you haven't noticed, real life is a bit different from TV ads. If you have an accident, your car insurance company will take a close look at your claim before mailing you a check. And the check may be written for an amount much smaller than you had hoped. For this reason, you should be intimately familiar with the terms of your policy and call the company with any questions you might have.
Now that you have made several practical and philosophical decisions, it's time to start shopping. Begin by setting aside about an hour for this task. Bring all your records — your current insurance policy, your driver license number and your vehicle registration. Drink plenty of coffee. Have a phone at your elbow. And, of course, power up your computer.
Begin with the online services. If you go to Netquote.com or other insurance quote sites, you can type in your information and get a list of comparative quotes. The form takes about 15 minutes to complete. If this bores you, just remind yourself that you are saving money and you can use that money to buy something nice for yourself. If the entire shopping process takes you two hours to complete, and you save $800, you're effectively earning $400 an hour.
A few things to keep in mind: (1) When you use quote sites, you may not get instant insurance quotes. Some companies may contact you later by e-mail, and some that are not "direct providers" may put you in touch with a local agent, who will then calculate a quote for you. (A "direct provider," like Geico, sells an insurance policy to you directly; other companies like State Farm sell insurance through local agents. We'll discuss the pros and cons of each later.) (2) It's not easy to get quotes from these sites in all states — if you live in New Jersey, for instance, you'll probably find it faster to pick up the phone, since most insurers currently don't provide online quotes for this state.
You can also try getting insurance quotes from some of the insurance companies listed on the Edmunds.com Web site — Geico, InsWeb, or Insurance.com. The forms will take about 10 minutes each to complete.
Of course, there are many other insurers that you can contact online. But remember, while you're researching companies, make notes in a separate computer file or on a piece of paper divided into categories. This will keep you from duplicating your efforts. When you visit the different online insurance sites you should take note of several things:

• Annual and monthly rates for the different types of coverage — make sure to keep the coverage limits the same so that you can make "apples-to-apples" comparisons
• An 800 number to call for questions you can't get answered online
• The insurance company's payment policy (When is your payment due? What happens if you're late in making a payment?)
• Discounts offered by the insurance company that pertain to you
• The insurance company's consumer complaint ratio from your state's department of insurance Web site (more on this below)
• The insurance company's A.M. Best and Standard & Poor's ratings (more on this below)

Once you have exhausted your online options, it's time to work the phones. Those companies you haven't been able to get an online quote from should be contacted. Surprisingly, doing this process verbally can actually go faster than the online counterpart, providing you have all the information regarding your driver license and vehicle registration close at hand. When you get a quote, be sure to confirm the price. Also, ask them to fax or e-mail the quote to you as a record.
While talking to the insurance companies' telephone salespeople, make sure you explore all options relating to discounts. Insurance companies give discounts for a good driving record, favorable credit score, safety equipment (for example, antilock brakes), certain occupations or professional affiliations, and more.
Always bear in mind that your mission isn't just to buy the cheapest car insurance out there; it is to buy the cheapest insurance and still receive adequate coverage and service. "You don't want to pay to get a great deal on insurance and then not get your car repaired after an accident," Heller noted.
Your final selection should depend on two things:
a. the reliability of the insurance company based on the criteria above;
b. the price of the quote.
We can all find the lowest premium, but it may not be immediately obvious how to determine whether a company is reliable. When we say "reliable," we're talking about how the insurer treats you, the customer. Particularly, how will the company deal with you when you file a claim? Will you be paid the full amount to which you are entitled? And will you be paid promptly?
While there are never any guarantees, we've come up with several ways of seeking out the most reliable insurance companies:

1. Visit your state's department of insurance Web site. Although you may not be familiar with it due to lack of marketing, your state, and every state, has a department of insurance. Most departments have Web sites, and many publish "consumer complaint ratios" for all of the insurance companies that sell policies in their state. This ratio tells you how many complaints an insurance company received per 1,000 claims. All of the experts we interviewed recommended that consumers use complaint ratios as a resource before making a decision. "Just because they're a big name doesn't mean that they'll be a 'good neighbor' or that you'll be 'in their hands,'" Heller noted. If you can't get complaint ratios for your state, he said that you can often get a good idea of how a company treats its customers by comparing the complaint ratios published by other states (this obviously shouldn't be the only deciding factor since a single insurance company often varies significantly from state to state — consistently favorable or unfavorable ratios may be revealing, though). Another consideration: "High-risk insurers come out the worst [in the consumer complaint ratios]," said Brian Sullivan, a recognized insurance expert and editor of Auto Insurance Report, a weekly insurance industry publication. "Whenever you have a really big claim, it's more complicated.... And these companies tend to insure people who get into big accidents." Regardless, a high number of complaints should give you pause, even if the company is financially appealing. Similarly, be sure to jot down those companies with favorable ratios. Howard's Web site provides links and contact information for every state's department of insurance. Additionally, the department of insurance sites often provide basic rate comparison surveys. These can give you a rough idea of which insurers might interest you on a financial basis without the hassle of typing in all your personal information (as you must when you use one of the quote sites described above). This may be particularly useful if you're going to use the phone, rather than the Web, to shop.
2. Find out which companies body shops would recommend. Howard offered another idea that you may never have considered: "Contact the local body shops of dealerships or others that you trust. See which companies they would recommend." You can compare the consumer complaint ratios with what the body shop managers say. Clearly, this kind of research is more time-consuming than simply finding the lowest premium rate, but if you have a claim, you want to make sure that your vehicle is repaired correctly and completely with minimal hassle and that OEM (original equipment manufacturer) parts are used. Howard, who is involved in an effort to create guidelines for the use of aftermarket parts, said that consumers should avoid them for the time being. "Right now, these parts are so incredibly inferior. Body shop managers will tell you which insurers are pushing aftermarket parts." A March 12, 2001, I-CAN press release explains the protections consumers currently have in each state — it's rather fortuitous to live in Minnesota, the only state that prohibits insurers from requiring the use of aftermarket parts.
3. Consider working with an insurance agent. It used to be that everyone purchased their auto insurance from an agent, but now, companies like Amica, Esurance, Geico and others allow you to purchase insurance directly — over the phone from a customer service representative or online. Still, many of the major players have preserved their national networks of local agents — even if you use State Farm's or Allstate's Web site, you will still be assigned a local agent. Before we delve further, you should be aware there are two kinds of agents: (1) the captive agent who represents only one insurance company (AAA, Allstate, State Farm, and the like); and (2) the independent agent, also known as a broker, who represents several insurance companies (for example, Erie and Progressive are both sold through independent agents) and therefore does not have a vested interest in selling you a policy from one particular company. Experts say that consumers who sign on with agents generally have an advantage during the claims process. "The agent has a vested interest in you being happy," Sullivan said. "The claims representative has a general desire to keep you happy, but it's not the same." Further, an agent can become familiar with your situation and guide you toward a suitable policy, Howard said. "Don't rule out direct providers, but my personal preference is to have an agent, preferably an independent agent, write your policy for you.... An independent agent would become aware of less advantageous conditions with one company [and help you move to another]. You can change carriers without changing your agent. I encourage consumers to develop a relationship with their agent." The prospect of good working relations with an agent may help you to make a decision: When Heller purchased auto insurance for the first time, two insurers gave him similar quotes but he went for the slightly higher one because the agent had been highly recommended by a friend. "You shouldn't go direct without always checking out other options," he said. "[...But] never feel pressured by a broker or an agent. Take the time to talk with an agent or a broker as well as do your online research. You may not need an agent — you may find a better deal with a company that operates direct." Independent agents may charge a fee for their services, but you may be able to negotiate. You should agree upon any fee in writing before making a purchase. Look for agents who are certified by Independent Insurance Agents of America (Big "I") or PIA (Professional Insurance Agents).
4. Check out the financial strength ratings for the companies that interest you. Refer to the A.M. Best and Standard & Poor's ratings. Both companies publish financial strength ratings for all insurance companies — these "measure" an insurance company's ability to pay out a claim. The A.M. Best rating is expressed as a letter grade from A++ (the highest) to D. Some companies may be assigned ratings of E (indicating regulatory action regarding the company's solvency), F (in liquidation) and S (suspended). In any case, you should only work with companies that have at least a B+ rating. The Standard & Poor's ratings range from AAA (the highest) to CC. Additionally, some companies receive ratings of R (under regulatory supervision) and NR, which means 'not rated'. The letter grades might be modified by a + or - mark. Consider only those companies that have at least a BBB rating. Insurance companies often provide this information on their Web sites, but if not, you can run a search at the A.M. Best and Standard & Poor's sites. Keep in mind that these ratings have nothing to do with the way an insurance company treats its customers.
5. Skim J.D. Power and Associates' auto insurance ratings. Another basic resource is J.D. Power and Associates' auto insurance ratings. Two of the top insurers in the study, Amica and Erie, are also companies that Howard recommends: "Erie is sold by independent agents, who are very knowledgeable about the product. I like their claims handling approach. Almost all other companies look at a claim and find a way to not pay it. Erie and Amica will look at it and try to find a way to cover it."
6. Don't assume that affinity programs have your best interests at heart. Sometimes auto insurers will team up with an auto manufacturer, union, trade association, or other entity to offer a select group of people insurance policies at a discounted rate — this is known as an "affinity program." For instance, Ford owners can get a special rate through The Hartford. Don't assume that such an insurance company will provide superior customer service — research these as rigorously as you would an unaffiliated company. "You do get a bit of a premium break, but I would still say go to consumer complaint ratios at your state's department of insurance Web site," Howard advised. "It has been my experience that insurance companies that enter into third-party mass-marketing programs are lacking when it comes to service."
7. If insurers won't treat you right, contact your legislators. It's not always easy to find affordable, reliable car insurance, particularly if you don't make a lot of money and live in an urban area. Your state's legislators, of course, are the people who require you to purchase insurance in the first place (unless you live in New Hampshire, Tennessee or Wisconsin). Contact these officials if you can't find a policy that you can afford or if your current insurer has treated you unfairly during the claims process. "Particularly for low-income consumers," Heller noted, "auto insurance is too expensive relative to their income to even think about.... We urge motorists to get some coverage but also to let their elected officials know that they're having trouble finding affordable insurance." Heller was the leading advocate behind the implementation of the Lifeline Auto Insurance Plan, a pilot program in California that makes affordable auto insurance available to low-income residents of Los Angeles and San Francisco counties (areas that typically have astronomical insurance rates) with good driving records. The program was possible only because "low-income motorists let lawmakers know that 80 percent of the people in their neighborhood were uninsured," he said.

So, you've done your research, and you've decided on a company. Before you sign, though, read the policy. In addition to verifying that it contains the coverage you want, there are two clauses that you should look for in the contract:

1. Retain your right to sue. "Find out if you are giving up your right to go to court and will be forced into arbitration if there is a disagreement [between you and the insurance company]," Heller advised. "You're much better off if you don't give up this right.... It makes it easier for [insurers] to take advantage of you." If you find a clause to this effect, all isn't necessarily lost. "At least in theory, a contract is a mutual agreement, so you should be able to cross out that line in the policy," Heller said. If the company won't agree to the policy sans clause, then you should probably take your business elsewhere.
2. Avoid aftermarket parts requirements. "If an insurance company has written in the policy that 'new factory', 'like kind and quality', or 'aftermarket parts' [may be used for body shop repairs], ...go on to the next company," Howard said. If you own a relatively new car that you plan to keep for a while, you will probably be much happier if you spend a little more time researching companies on the front end rather than try to fight the company when you have a claim.

After you lock in the insurance policy you want with the company you select, you have two more things to do. The first is to cancel coverage with your existing insurance company. Second, if your state requires you to carry proof of insurance, make sure you either have it in your wallet or the glove compartment of your car (some experts discourage this, however — if your car is stolen, the thief has everything he needs to prove the vehicle is his).
Now, there's one last thing to do: reward yourself for saving so much money on your car insurance.