HEELS ON WHEELS: Basic Car Insurance Coverage For Women

SEE ALSO Can You Save on Car insurance?

HEELS ON WHEELS
By Katrina Ramser
San Francisco Bureau
The Auto Channel

INTRO TO CAR INSURANCE COVERAGE
You've got to protect your assets. I'm talking beyond the depreciating object, or what we refer to as cars. If you are not property covered on the road, an unfortunate chain of financial events can alter your life, health and other vital belongings forever. In 2007, according to the Insurance Institute for Highway Safety (IIHS) 41,059 people died in motor vehicle crashes. A whopping 32 percent of these deaths were caused by alcohol – break it down further and that comes out to be one fatality every forty minutes. We can be defensive or responsible drivers, but so much is out of our control: Reckless or drunk drivers, ill-maintained cars, and bad weather – just a few of the surprises awaiting you the moment you hit the road. It's just plain unsafe (and even illegal) to not have certain vehicle coverage. So how do you figure out how to get the car coverage you need – and don't need?

First, Get Yourself Covered With Enough Car Insurance
While we all have financial goals to get through – get out of credit card debt, save for an emergency fund, plan for retirement – you need appropriate insurance right now. I'm talking at least health and car. You want amble – but not extravagant – car insurance. For example, it's important to have bodily injury liability to cover physical or human damages. Property liability covers the property of others, being a car or anything else involved in the collision. Whether or not you want collision coverage or comprehensive coverage for your vehicle depends on the value of the vehicle. A typical but modest coverage plan would be expressed as 15/30/15. This means you have $15,000 of bodily injury coverage for each person with a $30,000 limit per accident, combined with $15,000 in property damage. If you don't feel these modest numbers are enough – if you're worried someone could come after your assets – shoot for more, like a 100/300/50 plan. You pay a premium for your coverage, which you can either pay in minimum monthly installments or in "full" (usually two pay periods per year). Buy higher deductibles – or what you agree to pay out-of-pocket when an accident goes down – to lower the premium cost. If you raise your deducible to $1,000, says personal finance guru Suze Orman, you'll reduce your premium cost overall by 15-30%. But make sure you have $1,000 in an emergency fund to cover the deducible.

Find Out if an Extended Service Plan or Warranty is Right For You
Two reasons why you might want to look closer at getting this type of coverage: Consumers are buying used and holding onto their cars longer. The limited or factory warranty covers roughly to 36,000 miles – not enough, as major malfunctions aren't going to go wrong in a newer car with this many miles unless there's a recall. But as the miles start creeping, the likelihood of expensive things going wrong or needing replacement, like the air conditioning or transmission, increase. Enter an extended service plan aimed to pay for these costs with a small-to-zero deductible on your end. What makes extended plans affordable is the fact they can be tailored to your vehicle or budget. You also do not have to buy the plan a dealer pushes; you can purchase a third-party agreement. Like regular car insurance, you'll have a premium and deductible. You want to make sure the details look out for you. Make sure you do not have to pay upfront for repair costs (only to be reimbursed later); you can be serviced by any certified mechanic (verses franchised dealers only); and the agreement is transferable in case you sell the vehicle.

What About Gap Insurance, Uninsured Motorists, and Everything in Between?
We've covered the basics and need-to-haves, but there are other types of car insurance. Gap insurance, for example, which pays the difference between the cash value of a vehicle and the owed balance in case of total collision. And under your car policy you can included uninsured/underinsured coverage, which picks up the bill when the other driver cannot. Instead of taking beyond the basics, you might want to think about creating a Car Fund instead, located in an online bank account earning interest. At any rate, whatever insurance or warranty plan (and the accompanying deductibles) you are teaching yourself to have a cushion for when things do – not if – go wrong with the car.