Diligently shopping for auto insurance is the key to obtaining the best coverage at a premium you can afford, and will prevent unexpected surprises that could land you in potential legal entanglements should you be involved in an accident. Underinsured motorists are subject to possible lawsuits, and their personal assets and future earnings placed at risk, if their liability limits are inadequate to pay for bodily injuries or property damage.

A five-year study conducted by one major insurance company disclosed a significant variance in six-month premiums among carriers.

Comparing rates among the larger companies, independent agents, and Internet/phone-based carriers is the first step. Also find out the criteria each company uses in determining its rate structure and the process each has for processing claims. Scott McCartney of the Independent Insurance Agents of America advises, "Call around a lot. Don't always grab the first quote you get. Make several calls, ask the same questions and be sure to get quotes on exactly the same coverage from each carrier."

Keep in mind that historically men younger than age 25 pose the greatest insurability risk, and middle-aged, non-smoking mothers pose the least risk. Because of greater potential of theft and accidents prevalent in urban areas as opposed to rural locales and small towns, your rates will be higher if you live in a larger city. The type of vehicle you drive and the number of miles that you typically drive each year are also determining factors. If you have gotten several tickets or filed several insurance claims, you may be denied coverage by some carriers, but since most states require personal liability coverage, you are actually guaranteed coverage through high-risk insurers.

Deciphering the parts of auto insurance may appear to be intimidating, but really is not. The first term you may encounter, Collision, refers to the amount of money that will paid to repair damages to your car caused in an accident, whether it was your fault or someone else's. If another party is found to be responsible, the insurance company will collect monies either from the other person or the other insurance company. The depreciated value of your vehicle determines the maximum amount of collision coverage you may have. Unless you have already paid off your vehicle, you have to maintain collision coverage. Comprehensive coverage goes one step farther, paying for theft and damage caused by vandalism, acts of God, striking an animal, and storms.

Medical coverage pays the initial medical bills for you and your family as well as other passengers. Liability coverage may be used to pay medical bills of non-family passengers if they exceed your medical coverage limit, but you or family members would have to use personal medical insurance for additional coverage. Your medical coverage can also be used if you or a family member are a passenger in a car involved in an accident or if you are a pedestrian struck by a car.

Liability coverage pays for bodily injury or property damage for which you are legally responsible while driving your vehicle. This also applies to any family member living with you and listed with the insurance company as a driver on your policy, as well as anyone else driving your car with your permission.

Uninsured Motorist coverage pays for your property damage and personal injury if you are involved in an accident with an uninsured motorist, as well as hit-and-run incidents. This coverage is required in many states. Likewise, Underinsured Motorist coverage pays for your property damage and personal injury when the amount of damage is more than the other person's liability limits. This coverage becomes effective at the end of the other person's liability limit.

If you also have homeowner's liability coverage, you could also add Personal Liability Umbrella coverage to your auto policy. This additional coverage pays for personal injury or property damage that exceeds the original vehicle or homeowner's policy limit, up to the umbrella limit. Usually, the premium for this additional coverage is very low.

Gap Insurance coverage provides for the difference between the collision or comprehensive coverage amount you would receive if your vehicle were totaled and the amount remaining on your lease or vehicle loan. You would be responsible for the difference if your vehicle payoff amount is more than what you would receive under your comprehensive or collision coverage.

Other optional coverage includes emergency towing or repairs while you are traveling and rental car reimbursement while your car is being repaired.

Many states have No-Fault Insurance provisions, whereby insurance companies cover a clients' personal injury claims regardless of who was at legal fault. The objective of these provisions is to reduce claims and litigation, but individuals are still free to sue one another under certain conditions. educing claims and litigation.

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The Law Society
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