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Choosing the Right Auto Insurance

Rather than basing your choice of coverage type on what you think is affordable, pick what you need and make it affordable. Assess your situation and know the coverage types well.

Ask yourself:

1. How long do you plan on using that car?

If the answer is "not long", and you are probably going to get a newer vehicle anyhow sometime soon, you might not need to get Collision coverage or Comprehensive coverage.

2. How safe of a driver are you?

If you know that you never break any laws, always obey the speed limit, and follow the rules of the road, you might not need to worry about liability coverage so much. Yes, you'll still have to get it, but you might not need to add any coverage above the state minimums.

3. Do you already have good health insurance?

If so, you probably don't have to worry so much about getting an auto insurance policy that pays for medical bills. Medical coverage is redundant if you have good health insurance.

4. Does your location have any special dangers?

If you live in a place with a lot of natural disasters (such as hurricanes and tornadoes) or even if you drive near woods full of deer, you should consider getting Comprehensive Other Than Collision coverage. It's also good for more dangerous areas where you are concerned about theft and vandalism.

Choosing the Right Amount of Coverage

Don't get less auto insurance than you need. State minimums are usually not enough.

But don't get too much coverage. That's like paying for nothing!

Ask yourself:

1. What is the real value of your vehicle?

If you are paying for more coverage than it would cost to replace the car, you are wasting money. Determine the real value of your car and cover that.

2. What do you stand to lose?

If you own a home and/or have other assets, you stand to lose all of that should you be responsible for a collision. To protect yourself from losing all your assets in a collision, make sure you get enough Liability coverage to protect those assets.

3. How much do you drive?

If you are on the road all of the time, you are more likely to be involved in a collision. Balance that risk against your coverage amount.

Choosing the Right Auto Insurance Provider

To make sure you are doing business with the right people, check these:

• Consumer reviews

• JD Power rankings

• Standard & Poor's financial outlook

• The company's point schedule – ask an agent how much they increase premiums for tickets and collisions