Monkeygeek.com recently published an article, the Best Car Insurance Companies for your Needs, that featured advice from Dr. David Marlett, Managing Director of Appalachian State University's Brantley Risk and Insurance Center and IIANC Distinguished Professor of Insurance at Appalachian State University.
Dr. Marlett, and other subject matter experts, weighed in to help consumers navigate auto insurance. Here's what he had to say:
How does car insurance differ from other types of coverage and why is it so important for drivers?
Auto liability insurance is legally required to be purchased if you are operating a vehicle on the road. Lenders also require physical damage coverage if you borrow money to purchase the vehicle. Liability coverage is very important in the event you are deemed negligent and held responsible for damages. Otherwise, you'll have to use your own money to pay for the claims. We all have a responsibility to compensate other people we accidentally injure.
How should drivers balance risk management and affordability when it comes to car insurance?
Drivers are required to purchase the minimum insurance required by law. If they can't afford it, they shouldn't be operating a vehicle.Instead, they should explore other options for transportation. The best way to get affordable liability coverage is to avoid speeding tickets, don't text and drive and improve credit scores. Some cost factors can't be controlled, though, like age and gender.
Consumers can save money on physical damage coverage by owning an older, low-value vehicle. I strongly encourage people to purchase more than the minimum insurance required because the limits are low and are quickly exhausted following a loss with even minor injuries.
What can consumers do to better educate themselves on car insurance policies, coverage and pricing?
You can contact an insurance agent or company to walk you through a quote. I recommend contacting at least three different insurers so you can compare costs. An independent agent can do this for you if they represent multiple insurers.
Most states have an insurance commissioner and department of insurance offices that can offer guidance to the public and objective information online. I find the Insurance Information Institute website helpful as well.
Auto insurance premiums are set based on a variety of information such as driving record, location and credit history. What challenges do consumers face in this type of pricing structure? How can drivers meet or manage these challenges?
Some of the factors can be controlled (driving record and credit score), while others can't (age, where you live and gender). Auto insurance rates are state regulated, so insurers are required to justify why they charge certain premiums to drivers. It's remarkable how insurers rate drivers so differently and the premiums they charge. Auto insurance is highly competitive, so shop around and get quotes from multiple insurers. There is a wide range of prices, so an extra 20 minutes getting a quote could save you hundreds of dollars.
Insurance professor offers expert advice on car insurance in Moneygeek.com article
Dave Marlett