Your insurance company can’t require you to use only certain kinds of auto repair parts. However, if the insurance company’s rates are based on a certain type of part and you want something different, it can ask you to pay the difference if the part you want is more expensive.

The parts most frequently damaged in auto accidents are “crash parts”. These are the sheet metal pieces that cover the engine and frame of the car. There are two sources for crash parts: auto manufacturers, who sell them under their own names, also known as original-equipment manufacturers (OEMs), and generic or aftermarket crash parts suppliers. Studies have demonstrated that these crash parts do not affect the safety of the car. The development of a market in generic parts has brought prices for car replacement parts down and can help consumers save money.

In general, if generic parts have been ordered for the repair of your car, this information must be disclosed. The car repair order should state that the parts are not from the original manufacturer and the warranty may be different. Many generic parts are made at the same factories as OEM parts, and in fact very few OEM parts are actually made by car makers.

Insurance companies that use generic parts guarantee the parts they use. If the part doesn’t fit properly, the insurance company will generally put on an OEM part at no extra cost.

Some auto insurance companies offer their policyholders a choice between OEM and generic repair parts as part of an endorsement (addition to the policy that changes its terms and conditions) that includes other choices as well. Some always specify OEM parts for repairs and some use OEM parts for repairing recent model cars. A few states require insurance companies to offer generic parts when they exist and some may require OEM parts to be used.

Ask your insurance agent about your state and your insurance company’s claim settlement guidelines so that you’ll know what to expect if your car has to be repaired after an accident.

There are several standard guidelines for determining the value of your car for insurance purposes. You and your insurer can refer to one of the books that list the depreciated value of all new and used cars. One of these books is published by the National Association of Automobile Dealers another is published by Kelley Blue Book.

When you file your claim, your insurance company will refer you to a claims adjuster. The adjuster will verify the loss and determine what it will cost to repair the car. The adjuster’s estimate can serve as a benchmark to which to compare your own mechanic’s estimate.

No good adjuster or insurance company will expect you to sign an agreement accepting the insurer’s estimate as the total claim payment until you’ve established, to your own satisfaction, that it will cover the cost of repair. The insurer will expect you to get your own estimate from your mechanic, garage or car dealer. Don’t allow yourself to feel pressured into accepting the insurer’s estimate of repair costs without getting at least one estimate of your own.

Your insurance company can’t require you to have repairs done at a particular shop. But they can insist that you get more than one estimate for the work to be done on your car. Just as you want to make sure that your car is adequately repaired, the insurer wants to make sure it doesn’t pay a grossly inflated repair bill.

Don’t be surprised if your insurance company opts to pay for the lowest bid. You don’t have to accept that bid if you believe the low bid won’t adequately repair your car. Don’t hesitate to argue with the adjuster if you really believe his repair estimate is too low based on what your mechanic has told you.

One factor that could reduce the amount of your claim for a repair job is what insurance companies call betterment. If your old car is repaired with brand-new parts, your insurer may argue that the repairs have actually enhanced the car’s value and therefore they can legitimately reduce your claim by the difference between a used part and a new one.

It is up to your insurer to decide whether to pay for repairing your car or to declare it a total loss and pay you its book value. Most standard auto policies will not pay to repair a vehicle if the repairs cost more than the cash value assigned to the car. There won’t be any dispute about whether to repair the car if it was completely totaled. But you may argue about what the pieces of the car were worth when they were assembled as a car. For you to get a settlement higher than the book value of your car’s make and model, you will have to submit evidence such as mileage records, service history and affidavits from mechanics to show that your car was worth more. You’re entitled to the market price of the car you just lost. You shouldn’t get more or less than what you are due.

You may be reluctant to file a claim because you fear that your premium will go up or your insurance will be canceled. Practices vary from company to company. In general, an insurer will increase your premium by specific percentages for each chargeable claim made against your policy above a specific dollar amount. A chargeable claim is one the insurer considers primarily your fault. The percentages and ceilings vary from company to company. These increases generally stay on your premium for three years following the claim.

Your company may also decide not to renew your policy if your driving record gets markedly worse or you have several accidents. Different insurers have different rules about what constitutes an unacceptably bad driving record. But some accidents, such as those caused by drunk driving, will probably trigger a non-renewal from virtually every insurance company.

If you have an accident but don‘t report it to your insurer, you are taking a risk, even if the damage seems minor. If the other driver sues you weeks or months later, your failure to report the accident might cause your insurer to refuse to honor the policy. And even if they do honor the policy, the delay will certainly make it harder for the insurer to gather evidence to represent you.

If you are not satisfied with how your claim is being handled, there are steps you can take.

1. Let your agent or company representative know that you are unhappy.
   If the agant or representative is unable to solve your problem, get the name and phone number of the head of the insurer’s claims department. Your insurance company may also have a consumer complaint department that can help.
2. Be prepared to support your case.
   Send documents and a letter explaining why you are not satisfied and make sure you have the figures to back up your argument. Be certain to include your address, claim number, day and evening phone numbers and any other important identifying information.
3. Review your auto insurance policy.
   Most companies offer either arbitration or appraisal services to help settle differences and disputes. Your insurance policy will explain these options.
4. Contact your state insurance department.
   Explain the reasons for the disagreement to a consumer services representative at the department.
5. Contact an arbitrator to hear your case.
   An independent arbitrator with experience in insurance matters can decide if the settlement you were offered is fair. Your insurance company may suggest an arbitrator or you can get your own from the American Arbitration Association at 212-484-4000 ( or http://www.adr.org ).
6. Consult an attorney.
   As a last resort, consult an attorney who specializes in auto insurance. Each state’s bar association offers a free legal referral service, which will give you names of qualified candidates. Attorneys work either on an hourly rate or on a contingency basis, depending on the type of case. Get the attorney’s fee structure in writing. You can remain current on the progress of your claim by requesting that you receive copies from your attorney of all correspondence. Your attorney must have your agreement before committing to any settlement.
   After your claim has been settled, take time to re-evaluate your auto insurance coverage to make sure you have adequate protection to cover you against any future damage or liability claims.

Many drivers don’t think about their insurance coverage until after they have an accident and call their insurance company to file a claim to help pay for car repairs, a rental car and other expenses.

Unfortunately, many insured drivers are surprised to find out that their auto insurance does not automatically cover the cost of a replacement rental car after an accident. Since the average car is in the repair shop for two weeks after an accident, it can cost as much as $500 to rent a replacement car. But, some insured drivers pay little or nothing to rent a car because of an inexpensive but often overlooked option known as rental reimbursement.

Rental reimbursement coverage is available for only $1 or $2 a month with almost every auto insurance policy, but it is bypassed frequently by those who believe they will not have a car accident or those shopping only for the lowest cost premium. The cost of a rental replacement car adds up fast, so even if you don’t have an accident for eight or nine years, the coverage pays for itself when you need it most.

Sometimes working out the details of a claim with the auto insurance company can take time. Even if the accident is the other driver’s fault, you may have to wait several days or longer to get the other insurance company to agree to pay for a rental car. With your own coverage, there is no waiting.

If you are ever sued, your standard homeowners or auto policy will provide you with some liability coverage, paying for judgments against you and your attorney’s fees, up to a limit set in the policy. However, in our litigious society, you may want to have an extra layer of liability protection. That’s what a personal umbrella liability policy provides.

An umbrella policy kicks in when you reach the limit on the underlying liability coverage in a homeowners, renters, condo or auto policy. It will also cover you for things such as libel and slander.

For about $150 to $300 per year you can buy a $1 million personal umbrella liability policy. The next million will cost about $75, and $50 for every million after that.

Because the personal umbrella policy goes into effect after the underlying coverage is exhausted, there are certain limits that usually must be met in order to purchase this coverage. Most insurers will want you to have about $250,000 of liability insurance on your auto policy and $300,000 of liability insurance on your homeowners policy before selling you an umbrella liability policy for $1 million of additional coverage.

Almost every state requires you to buy a minimum amount of liability coverage. Chances are that you will need more liability insurance than the state requires because accidents cost more than the minimum limits. If you’re found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out!

The Insurance Information Institute (I.I.I.) recommends that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your net worth is more than $300,000, consider buying additional liability insurance. You may also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverages are exhausted. Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. If you have your homeowners and auto insurance with the same company, check out the cost of coverage with this company first. If you have coverage with different companies, it may be easier to buy it from your auto insurance company.

In addition to liability coverage, consider buying collision and comprehensive coverage. You don’t decide how much to buy. Your coverage reflects the market value of your car and the cost of repairing it.

Decide on a deductible—the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.

The price you pay for your auto insurance can vary by hundreds of dollars, depending what type of car you have and the insurance company you buy your policy from. Here are some ways to save money.

Shop around….Prices vary from company to company, so it pays to shop around. Get at least three price quotes. You can call companies directly or access information on the Internet. Your state insurance department may also provide comparisons of prices charged by major insurers.

Get quotes from different types of insurance companies. Some sell through their own agents. These agencies have the same name as the insurance company. Some sell through independent agents who offer policies from several insurance companies. Other companies sell directly to consumers over the phone or via the Internet.
But don’t shop by price alone. You want a company that
answers your questions and handles claims fairly and efficiently. Ask friends and relatives for their recommendations. Contact your state insurance department to find out whether they make available consumer complaint ratios by company.

You can also check the financial health of insurance companies through independent rating companies and by consulting consumer magazines.

Select an agent or company representative who takes the time to answer your questions. Remember, you’ll be dealing with this company if you have an accident or other emergency.

Before you buy a car, compare insurance costs; Before you buy a new or used car, check into insurance costs. Your premium is based in part on the car’s sticker price, the cost to repair it, its overall safety record, and the likelihood of theft. Many insurers offer discounts for features that reduce the risk of injuries or theft. These include air bags, anti-lock brakes, daytime running lights and anti-theft devices. Some states require insurers to give discounts for cars equipped with air bags or anti-lock brakes.

Cars that are favorite targets for thieves cost more to insure. Information that can help you decide what car to buy is available from the Insurance Institute for Highway Safety ( http://www.iihs.org ).

Ask for higher deductibles; Deductibles represent the amount of money you pay before your insurance policy kicks in. By requesting higher deductibles, you can lower your costs substantially. For example, increasing your deductible from $200 to $500 could reduce your collision and comprehensive coverage cost by 15 percent to 30 percent. Going to a $1,000 deductible can save you 40 percent or more.
Buy your homeowners and auto coverage from the same insurer; Many insurers will give you a discount if you buy two or more types of insurance from them. Also you may get a reduction if you have more than one vehicle insured with the same company. Some insurers reduce premiums for long-time customers. But shop around; you may save money buying from different insurance companies despite the multi-policy discount.

Take advantage of low-mileage discounts; Some companies offer discounts to motorists who drive a lower than average number of miles per year. Low mileage discounts can also apply to drivers who carpool to work.

Ask about group insurance; Some companies offer reductions to drivers who get insurance through a group plan from their employers, or through professional, business and alumni groups and other associations. Ask your employer or any groups or clubs to which you belong.

Maintain good credit; Your credit rating may affect what you pay for insurance, so keep a close eye on it. Credit makes insurance rates more accurate, fair and objective. While the use of insurance scoring varies from state to state and company to company, it is a fact that drivers with long, stable credit records have fewer accidents than drivers who don’t. There are various Internet services that allow you to check your credit rating and provide tips on how to improve your score.

Seek out safe driver discounts; Companies offer discounts to policyholders who have not had any accidents or moving violations for a number of years. You may also qualify for a cut if you have recently taken a defensive driving course.

Inquire about other discounts; You may get a break on your insurance if you are over 50 or in some cases 55 and retired or if there is a young driver on the policy who is a good student, has taken a drivers education course or is at a college, generally at least 100 miles away.

When you comparison shop, inquire about discounts for:

• $500 deductible
• $1,000 deductible
• More than 1 car
• No accidents in 3 years
• No moving violations in 3 years
• Drivers over 50-55 years of age
• Driver training course
• Defensive driving course
• Anti-theft device
• Low annual mileage
• Air bag
• Anti-lock brakes
• Daytime running lights
• Student drivers with good grades
• Auto and homeowners coverage with the same company
• College students away from home
• Long-time customer
• Other discounts

*The discounts listed may not be available in all states or from all insurance companies.

But don’t forget that the key to savings is not the discounts but the final price. A company that offers few discounts may still have a lower overall price.

There are many insurance companies, so choosing between them can be a challenge. Here are the main points to keep in mind when selecting an insurance company:

• Licensing
  Not every company is licensed to operate in each state. As a general rule, you should buy from a company licensed in your state, because then can you rely on your state insurance department to help if there’s a problem. To find out which companies are licensed in your state, contact the state insurance department.
• Price
  Many companies sell insurance policies and prices vary greatly from one to another, so it really pays to shop around. Get at least three price quotes from companies, agents and from the Internet. Your state insurance department may publish a guide that shows what insurers charge for different policies in various parts of your state.
• Financial Solidity
  You buy insurance to protect you financially and provide peace of mind. Select a company that is likely to be financially sound for many years, by using ratings from independent rating agencies.
• Service
  Your insurance company and its representatives should answer your questions and handle your claims fairly, efficiently and quickly. You can get a feel for whether this is the case by talking to other customers who have used a particular company or agent. You may also want to check a national claims database to see what complaint information it has on a company. Also, your state insurance department will be able to tell you if the insurance company you are considering doing business with had many consumer complaints about its service relative to the number of policies it sold.
• Comfort
  You should feel comfortable with your insurance purchase, whether you buy it from a local agent, directly from the company over the phone, or over the Internet. Make sure that the agent or company will be easy to reach if you have a question or need to file a claim.

If you lease a car, you still need to buy your own auto insurance policy. The auto dealer or bank that is financing the car will require you to buy collision and comprehensive coverage. You’ll need to buy these coverages in addition to the others that may be mandatory in your state, such as auto liability insurance.
Collision covers the damage to the car from an accident with another automobile or object.
Comprehensive covers a loss that is caused by something other than a collision with another car or object, such as a fire or theft or collision with a deer.
The leasing company may also require “gap” insurance. This refers to the fact that if you have an accident and your leased car is damaged beyond repair or “totaled,” there’s likely to be a difference between the amount that you still owe the auto dealer and the check you’ll get from your insurance company. That’s because the insurance company’s check is based on the car’s actual cash value which takes into account depreciation. The difference between the two amounts is known as the “gap.”

On a leased car, the cost of gap insurance is generally rolled into the lease payments. You don’t actually buy a gap policy. Generally, the auto dealer buys a master policy from an insurance company to cover all the cars it leases and charges you for a “gap waiver.” This means that if your leased car is totaled, you won’t have to pay the dealer the gap amount. Check with the auto dealer when leasing your car.

If you have an auto loan rather than a lease, you may want to buy gap insurance to protect yourself from having to come up with the gap amount if your car is totaled before you’ve finished paying for it. Ask your insurance agent about gap insurance or search the Internet. Gap insurance may not be available in some states.

Your auto policy may include six coverages. Each coverage is priced separately.

1. Bodily Injury Liability
This coverage applies to injuries that you, the designated driver or policyholder, cause to someone else. You and family members listed on the policy are also covered when driving someone else’s car with their permission.

It’s very important to have enough liability insurance, because if you are involved in a serious accident, you may be sued for a large sum of money. Definitely consider buying more than the state-required minimum to protect assets such as your home and savings.

2. Medical Payments or Personal Injury Protection (PIP)
This coverage pays for the treatment of injuries to the driver and passengers of the policyholder’s car. At its broadest, PIP can cover medical payments, lost wages and the cost of replacing services normally performed by someone injured in an auto accident. It may also cover funeral costs.

3. Property Damage Liability
This coverage pays for damage you (or someone driving the car with your permission) may cause to someone else’s property. Usually, this means damage to someone else’s car, but it also includes damage to lamp posts, telephone poles, fences, buildings or other structures your car hit.

4. Collision
This coverage pays for damage to your car resulting from a collision with another car, object or as a result of flipping over. It also covers damage caused by potholes. Collision coverage is generally sold with a deductible of $250 to $1,000—the higher your deductible, the lower your premium. Even if you are at fault for the accident, your collision coverage will reimburse you for the costs of repairing your car, minus the deductible. If you’re not at fault, your insurance company may try to recover the amount they paid you from the other driver’s insurance company. If they are successful, you’ll also be reimbursed for the deductible.

5. Comprehensive
This coverage reimburses you for loss due to theft or damage caused by something other than a collision with another car or object, such as fire, falling objects, missiles, explosion, earthquake, windstorm, hail, flood, vandalism, riot, or contact with animals such as birds or deer.

Comprehensive insurance is usually sold with a $100 to $300 deductible, though you may want to opt for a higher deductible as a way of lowering your premium.

Comprehensive insurance will also reimburse you if your windshield is cracked or shattered. Some companies offer glass coverage with or without a deductible.

States do not require that you purchase collision or comprehensive coverage, but if you have a car loan, your lender may insist you carry it until your loan is paid off.

6. Uninsured and Underinsured Motorist Coverage
This coverage will reimburse you, a member of your family, or a designated driver if one of you is hit by an uninsured or hit-and-run driver.

Underinsured motorist coverage comes into play when an at-fault driver has insufficient insurance to pay for your total loss. This coverage will also protect you if you are hit as a pedestrian.