When shopping for car insurance, learn from hurricanes

Hurricane Katrina offers many lessons in preparing for disaster, and adequately insuring your car is one of them. To save money, many people purchase only liability auto insurance — especially if they have older cars. This is the coverage required by law, and pays for damage caused by your car. However, in the event of a natural disaster, comprehensive coverage is what you’ll need to get back on the road. Damage caused by wind, hail, trees and even flooding is covered by comprehensive plans, as is damage from vandalism and theft. Your homeowner’s or renter’s insurance policy would most likely cover possessions in your car, which is important since natural disasters are sometimes followed by looting and vandalism. If you have only liability insurance for your car, you’ll be on the hook for the cost of repairs or replacement. Even if hurricanes Wilma or Katrina didn’t personally affect you last year, the potential impact isn’t over yet. One way you could be affected is by purchasing a used car that appears to be in good condition, but in fact was flooded in one of the Gulf Coast states. Flood-damaged cars are often moved to other states and sold to unsuspecting buyers. Experts put the estimate of flood-damaged vehicles last year somewhere between 250,000 and 500,000. While insured cars will be reported to the National Insurance Crime Bureau (NICB) by the issuers paying claims, not all cars are insured. This means flood-damaged cars may get scooped up at great prices at auctions or as trade-ins and potentially fall into the hands of used-car buyers. Robert Bryant, NICB president, recommends that buyers take precautions to ensure they don’t purchase one of these cars: • Check the vehicle identification number number of any car you’re considering buying against NICB’s online database of flood-damaged cars. This service is free and available at www.nicb.org. • Buy a vehicle history report from Carfax (www.carfax.com) or Autocheck (www.autocheck.com) to find out if the car is listed as flood damaged or originally titled in a Gulf Coast state. These reports cost about $20 for a single car or $25 for unlimited reports over a 30- to 60-day period. • Have the vehicle inspected by a licensed mechanic you trust before buying. • Inspect the car yourself. Look for signs of rust on engine parts and screws, or a mildew or musty smell. Thinking of buying a new car? One way to keep your auto insurance premiums down is to buy a car that nobody wants. No auto thieves, anyway. The NICB reports that car thieves in the United States continue to favor imports over domestic brands. Honda’s Civic and Accord, and Toyota’s Camry topped the list of the most stolen vehicles in 2004. The Dodge Caravan and Ram, Toyota pickup, Acura Integra, and Nissan Sentra also made the top 10 list. Insurance companies track the statistics of stolen cars and adjust auto insurance rates accordingly for the most popular makes and models. If you’re serious about saving money on insurance, check out the list at www.nicb.org. A car’s make, model, year, weight, horsepower and body type also influence the insurance premium. According to Robin Harbage of Progressive Auto Insurance, surveys reveal that even the most cost-conscientious shoppers are more concerned with the economics of buying a car rather than what it costs them to use it. Source: federaltimes.com