'Spring cleaning' for your auto insurance coverage

Gina Roberts-Grey
Spring cleaning isn't just for your home. It can apply to your auto insurance coverage, too. Here are four tips for making your auto insurance neat and tidy.
1.      Clean up the limits.
 Jennifer Nelson, an Allstate agent in New Jersey, says you may be able to clean up a portion of your policy’s liability coverage. Liability coverage protects another driver if you cause an accident.
Folded into liability is uninsured and under-insured motorist coverage – coverage that protects you if you’re hit by a driver who's not well-protected -- and personal injury protection (PIP). PIP, which is required in 16 states, pays medical bills for accident injuries, regardless of who was at fault. Every state except New Hampshire requires drivers to carry basic liability insurance.
Nelson says you can adjust your uninsured and underinsured limits based on your needs. For instance, you can carry enough uninsured and under-insured coverage to protect only your savings and investments in case you caused a crash and are sued.
For uninsured or under-insured coverage, you can set it as low as your state’s minimum limit. In Illinois, for instance, the minimum amount is $20,000 for the death or injury of one person in an accident and $40,000 for everyone involved in an accident; if three people are injured, only $40,000 in benefits will be paid. You always can increase the limit as needed.
“Think about how much money you would need to sustain your standard of living for a year or two if you were seriously injured -- that’s the limit you should purchase. Don’t let your agent talk you into a lower amount just to save a few dollars or be able to afford other lesser-important coverage,” Nelson says.
2.      Clear out collision and comprehensive.
Collision and comprehensive coverage are must-haves if your car is financed or leased, says Chad Bitterlich, vice president of Navion Insurance Associates Inc. in California. You've got to carry that coverage until the loan is paid off or the lease ends. After that, however, you can ditch the optional collision and comprehensive coverage.
As its name suggests, collision coverage refers to damage or injuries from a wreck. Comprehensive coverage protects you in case of damage or injuries not caused by a wreck.
3.      Sweep away the 'extras.' 
Auto insurers and insurance agents sometimes try to sell you on extras like identity theft coverage. Bitterlich warns that these extras may not be a great value, though. For one thing, the extras cost extra. For example, identity theft coverage can cost about $25 a year. Another downside: An insurer or agent may suggest you lower your liability coverage to make room for "these attractive extras," he says.
Here are four extras that you may be able to do without: 
  • Identity theft protection. You already may have identity theft protection through a credit card or an ID protection service like LifeLock. If that's the case, tacking this protection onto your auto insurance policy is an unnecessary expense, Bitterlich says.
  • Towing. Bitterlich says roadside assistance makes sense only if drive an older car. Furthermore, you don't need this coverage if you've got a AAA membership; even some credit cards pick up the tab for towing and other roadside services. “Many new cars include roadside assistance from the car manufacturer,” he says.
  • Rental reimbursement. If you've got another car at your disposal in case your vehicle is wrecked, you don't need extra coverage for car rentals, Nelson says.
  • Glass coverage. If this isn’t already part of your comprehensive coverage, Nelson recommends not bothering with it. “Glass replacement is often less than the deductible," she says, "and many major glass repair companies will give you special insurance pricing if you ask nicely and get a referral from your agent."
4. Dust off your files.
Sort through the copies of your policy that you’ve stuffed into a filing cabinet or desk drawer, and toss out the expired ones. “Every year, a renewal policy is issued and coverage can change,” says Bob Freitag, president of AmeriClaims Inc., a North Carolina company that helps consumers with insurance claims.
The only policy that you need to keep is the most current one.
If you don't have a copy of your policy, contact your insurer or agent and ask for a “certified” copy. "Store that in a convenient location in case you need to refer to it,” Freitag says.

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