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Comprehensive Car Insurance Plan Review

A comprehensive car insurance plan review is not merely an examination of the comprehensive portion of your auto policy; but rather, a complete look at every area of coverage you carry in the context of its appropriateness to your needs. Doing a review of your car insurance is a good idea every six months or at policy renewal time is a great idea. It does not take all that much time if you know the right things to focus on and the right questions to ask yourself. If you take the time to do a comprehensive car insurance plan review, you can be sure you are not taking on superfluous or excessive auto coverage, and you may even save yourself some money on your next policy. If you do not know what each area of coverage represents in your auto plan, you likely will have a hard time reviewing what you've got and evaluating it against your needs. Thus, the most logical first step in a car insurance plan review is getting to know each area of coverage and understanding the specific role it plays as part of the overall package.

How to Review Your Coverage

There are several areas of coverage common to full coverage policies. Taking a look at each one of the, and coming up with a definition for it can help you evaluate it against you needs. Many drivers just take their agent's word for it when it comes to these plans. Oftentimes we carry coverage and do not even know we have it until it's time to open a claim. This is not the way to approach your auto policy, not with so much on the line financially and otherwise.

Any extended discussion of the parts of a plan has to start with liability. This is the one common thread connecting all insurance consumers. Liability insurance appears on every policy because it is legally required in every state that mandates insurance protection for its drivers. Liability is generally the cheapest part of the policy because unlike some other areas of coverage, it does not actually protect the covered vehicle from damage, nor the driver from the cost of injury. Instead, it focuses on your financial responsibility in the aftermath of an at fault accident. And this responsibility at least in legal terms is to address the financial costs attached to the other driver's injuries and property losses.

There is no legal basis for requiring liable drivers to take care of their own vehicles, and no one would ever file a civil claim against themselves. But we do have a responsibility to take care of any property damage we cause in an at fault accident, as well as any reasonable medical care that may be required for other drivers, passengers and pedestrians. In some states additional responsibilities may also exist, such as providing for lost wages or pain and suffering. So clearly, the need for liability insurance is paramount to all of us, legal requirements aside. Without this important coverage, most of us would be unable to meet our financial responsibility in the wake of an injury accident for which we are found liable.

Beyond liability, there are other policy provisions that may also appear in your plan. Comprehensive and collision insurance are common to many policies. They both do what liability does not in protecting your own vehicle against covered loss. Collision insurance, as its name suggests, is limited to accident related losses. Comprehensive, on the other hand, picks up where collision coverage leaves off, providing protection in a variety of non accident related areas. For example, storm damage your car may sustain while it is parked outside is a comprehensive issue, as is physical damage from a break in or theft attempt. These two areas of protection are separate in technical terms, each with their own limits and deductibles; but they are closely related and combine to give your vehicle a great base of property protection.

Uninsured and underinsured insurance are actually required in some states, although in the majority of states across the country they are only optional. Still, they provide a great degree of protection and worth considering. But if you are up against a major financial crunch and are looking for parts of your plan to cut, take a look at your state's laws and see whether these areas might be candidates. Consider your home state's uninsured motorist rates as well. Some states have astronomical numbers of drivers with no auto insurance, while others have done a much better job addressing the problem and only have uninsured percentages in the low single digits.

Your plan might also have some other optional endorsements for you to look at. Make sure you understand every area of your policy and the specific job it is doing before you make any cuts. Do not just look at the parts costing the most money and make them your first target. There is a reason certain areas cost more, and you will find that out when you take a closer look.

Benefits of Auto Insurance Review

An annual auto insurance review can save the policy holder from expending resources on insurance protection that has lost its value over time. For example, collision insurance is a great area of protection to include on a package of protection for a new car or truck. Its limit of protection is equal to the value of the vehicle, so for newer vehicles this is quite an appreciable amount of money. But as the car ages, the value of collision goes down as well. Since its limit is tied to the market value of the vehicle, it becomes less helpful as time goes by. If you total a ten year old truck, the collision check you get from the insurer will be tiny compared to the one you would get if you totaled a truck that was only a few years old. So the cost of carrying this area of coverage gets harder to justify as the return on investment declines. The same is true of your comprehensive policy as well.

This is just one example of ways insurance review can benefit you as an insured policy holder. You can stay on top of your policy and make sure the money you are spending is working hard for you. As the vehicle gets older, diverting money away from the insurance plan can free up cash to save for the next vehicle when the time comes.

Get Quotes from Other Providers

Just looking at the specific provisions and language of your policy is not the only part of annual review you should undertake as a consumer. Policy holders should always be aware of how their providers stack up in the market. Get a few quotes from other providers based on the plan you want to carry going forward and make sure you are getting your best deal. This is easy to do nowadays with free quote sites such as this one. It doesn't take much of your time to examine the value of your policy, and this part of comprehensive car insurance plan review can save you money.


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