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Auto Insurance

When the first U.S. automobile insurance policy was purchased in 1898, there were barely 100 cars nationally. Horses and carriages ruled the roads and the main concern for both insurers and auto drivers was any injury those noisy new machines might do to horses.

Today, auto insurance is the most widely purchased of all property-casualty insurance, yet few drivers are familiar with the details of their particular policy.

Though this guide does not represent the provisions of any particular policy, it should serve as a starting point on your road to finding the best policy for your needs.

Why do I need auto insurance?

Your car is likely one of the most expensive things you own. Insurance protects your investment and guarantees you a way of coping with the expense of accidents, vandalism or theft. It also secures your financial responsibility to the institution lending you money to buy your vehicle.

When you drive you are responsible for the safety of your passengers, your fellow drivers, other people's property, pedestrians and yourself. Insurance helps ensure your ability to cover the costs of potential damages or injuries.

You are also required to be financi all y responsible by state laws, which are best satisfied through your insurance coverage. In most states insurance is a prerequisite to registering your car. So if you want to drive your own vehicle, you must be insured.

What are the different types of policies and what do they cover?

Auto insurance is divided into several types of coverage:

* Auto liability covers damage you cause to other people's property and bad injury to the people themselves.

* Collision covers damage to your own vehicle in an accident.

* Comprehensive (i.e., fire, theft and other non-collision damage) covers fire damage to your vehicle, break-ins, vandalism or theft, as well as natural disasters (earthquake, hail, hurricane, flood, etc.--unless the vehicle is overturned, then it is considered a collision).

* Medical payments insurance, usu all y in the range of $5,000 to $10,000, covers medical expenses for injuries. This "good-faith" coverage guarantees immediate medical payments for you, your passengers and other parties, regardless of who is at fault. It also covers you and members of your household in any accident involving an automobile, whether you are on foot, on a bicycle, in a friend's car.

* Uninsured motorist (UM) and underinsured motorist (UIM) coverage protects you if you are injured in an accident with others who themselves carry insufficient or no liability insurance.

* Extra coverages include expenses for towing, labor, temporary replacement vehicles, etc. These are gener all y defined as add-ons or �endorsements� to your policy.

How does adding drivers to my policy affect my rates?

The more people you all ow to drive your vehicle on a regular basis, the greater the chances of your vehicle being in an accident. Teenagers are especially expensive to insure because they are the least experienced drivers.

A driver's education course can help ease the burden of insurance costs since it teaches your teenager defensive driving techniques. If your child's high school does not offer driver's education, try to find one offered by another school or a private firm in the area. After all , the cost of driver's education could be cheaper than the extra cost of your insurance. (Many insurers offer "good student" discounts as well.)

An adult's driving experience can also affect your rates significantly. Don't assume that every adult you know has been driving since age 16 or is a competent driver with a clean record. Again, taking a defensive driving course is a good way for adults to prove they are responsible drivers, thus lowering their risk and their insurance rates. (This is a great solution for new couples who are jointly insured but unmatched in their driving skills or experience.)

What happens when I loan my car to someone? Is that person covered by my policy? Am I still covered?

Yes. Liability and coverage for physical damage (i.e., comprehensive and collision) always follow your car. So, if a friend borrows your car and has an accident, you're still protected against the cost of damages or injuries. Plus, if the driver of your car is insured, his/her policy will also be available to cover the cost of damages and injuries.

The same rules apply when you borrow someone else's vehicle. Your own insurance follows you no matter whose car you are driving. But the vehicle owner's policy is the key coverage if you have an accident.

What should I make sure my policy includes? Do I really need to read all the fine print?

While you don't need a law degree or an agent's license to understand your policy, you should read it thoroughly. After all, it is a binding legal contract. If there is anything you don't understand, ask your agent to explain it to you. You have the right to know what's in your policy.

If you wish clarification beyond your agent's explanation, or if you want to be certain that the policy is completely valid, contact your state's insurance department.

Do I need special insurance for a classic car?

You should always talk to your agent about coverage of rare and valuable property. Since a classic car usually cannot be replaced, you'll probably want ample compensation if it is lost. A classic car, because it is rare or unique, may indeed require a special insurance policy.

Under what circumstance do I not need certain types of auto insurance?

While most drivers today are gener all y insured for collision and theft, this coverage may not be necessary for every vehicle. Liability insurance, as mentioned earlier, is essential and in many states required. But if you drive a clunker�an older car that isn't worth much money�you may be able to do without collision insurance. If you have an accident, repair costs could easily be higher than the value of your vehicle, thus "totaling" it. This means your insurer will pay you the total book value of your vehicle, and that could be far less than the cost of your vehicle's repair. So, collision insurance may not cover your loss adequately.

Since it depends on special circumstances, contact your agent for guidance.

Home Insurance

The biggest asset for most people is their home. Lose that, and you will likely lose a big part, if not most, of your net worth. Even if you don�t own, but rent, you can still easily lose all your belongings in a sudden fire. That�s where homeowners and renters insurance comes into play.

Homeowners insurance will protect your property whether it�s a ranch in the country or a condo in the city. Homeowners insurance will not only cover a home structure, it will cover the contents as well. Of course, all of this depends on how much coverage you purchase and whether you have any add-ons, known as endorsements, attached to your policy.

Homeowners insurance also covers you for liability should someone be injured on your property. It will also cover damage to some of your possessions that are not located at your home. This includes damaged luggage on a trip or property stolen from your car.

One thing homeowners insurance doesn�t cover is damage from floods. So if you have a home in a low-lying area that may be vulnerable to rising water, contact our officece SM agent about purchasing flood insurance.

The most important thing about homeowners insurance is to have adequate coverage. If you do not purchase enough insurance, your home may not be tot all y covered. For that reason, you may want to look into a policy that increases your coverage limits at the rate of inflation.

Of course if you�re a renter, you will want insurance to cover the value of your possessions. (The landlord�s insurance only covers the structure� not your contents.) You'll also need renters insurance for liability coverage in case someone is injured in the apartment or house you rent.

Because everyone�s needs are not the same, it is best to consult a Trusted Choice SM insurance agent to help assess your needs and find the insurance policy that is right for you.

College Students

Home sweet dorm

Insurance companies consider college students to be residents of their parents� home, temporarily residing elsewhere. They also consider your dorm-room contents to be �personal property, located off premises�

Most homeowners/renters policies limit coverage up to 10 percent of personal property, off premises. If you have $75,000 of contents coverage at home, you will have $7,500 for an off premises dorm room. You will need to decide if that�s enough to repair or replace all electronics and other items likely to fill your trunk, back seat, and roof rack in the f all . If it�s not, you might consider purchasing a separate renters policy or property policy for the dorm room.

Moving on up

Nearly one-fifth of college students rent off-campus apartments. Most insurance companies consider these apartments to be a permanent residence. Therefore, the apartment will not be covered under the parents� homeowners/renters policy for contents or liability. Generally, the person who signs the lease is held liable (and may be sued) if someone is injured on their leased premises or by their property. A roommate or parent may also be sued, whether they�ve signed the lease or not, if the injured party thinks the roommate or parents might be responsible for the claim. Regardless of who signed the lease, when your child is living off-campus they should obtain their own renters policy. Many insurance companies will not insure multiple names, or unrelated names, on a single policy. However, if you, as a parent signed the lease, you and the student should be named as insureds on the policy.

The annual premium for renters insurance is very reasonable, usually less than $250 a year for about $15,000 worth of contents.

Up and away

Studying abroad can provide a host of insurance issues. For example, an insurance company can suspend theft insurance at a student�s domestic residence if he/she has been studying abroad for more than 45 days. Consult AIM to make sure your child is covered in at least the following major areas:

*Theft of personal property

*Trip cancellation/interruption

*Emergency medical evacuation and/or repatriation coverage

*Health and/or hospitalization

Hot wheels

Few colleges all ow freshman living on campus to bring their cars. But 70 percent of the rest of the students have them. Things to consider if you child has a car:

1. Leave the car at home: You might be eligible for a reduced rate if the car is titled in the student�s name, no one else will be driving it, and the student will reside more than 100 miles away from the car.

2. Take the car to college and:

*Notify your insurance company that the car will be garaged in another location. Premiums can be affected positively or adversely by a location change.

*State laws vary. For instance if your child goes from a �straight-liability� to a �no-fault� state, their liability coverage may not be adequate. Increasing or decreasing policy coverages will impact their premium accordingly.

*Consider letting your child assume the title to the car if they are 18 years or older. As the titleholder they must get their own auto policy. This will decrease your liability exposure.

*Discourage your child from all owing others to drive the car. Regardless of who may be using the car and for what purpose, your child is still responsible for the car and what is done with it.

Out of sight, out of network

Health insurance coverage is complex, at best. Imagine the potential difficulties for your child when they�re away from home. Problems can surface without warning, so it�s a good idea to familiarize your child with the coverages and emergency provisions of your plan and policy.

Mistakes in this area can be extremely costly and plans vary widely, so check with your health-plan administrator in advance to minimize surprises.

Here are some of the major issues to resolve before your child leaves for school:

*Age cutoff�Full-time students between the ages of 18-23 can usu all y be covered under their parents� health plan. Some plans have younger age cutoffs. Most require proof of continued enrollment from the school in order to keep coverage in force.

*Full-time or part-time�The definition of full-time or part-time student can vary between colleges and health plans. You will need a signed document from the enrollment officer or registrar for your insurance carrier to demonstrate full-time status.

*In network�If your health plan has a physicians� network where your child is going to college you will need a referral from your local physician.

*No physicians� network�Your plan may offer an indemnity option where you will pay 80 percent of all medical bills and the insurance company will pay 20 percent. Find out before your child leaves for school.

*College health plans�Most colleges offer some type of limited, campus-based, infirmary or emergency health care. Ask the registrar or student health services director for details.

*Ineligible�Your child is no longer eligible on your plan? Many colleges and insurance companies offer affordable, extremely limited health insurance plans for individuals. If the student is working while attending school, check with their employer to see if any health insurance benefits may be available.

Insuring your legacy

Experts recommend obtaining or increasing your existing life insurance to cover the total cost of your child�s tuition. When figuring that cost you will want to include: tuition, room and board, transportation, books, and supplies. Whether you have a college fund prepared for your child or are paying as they go, life insurance is a secure method to safeguard your child�s education.