Car insurance is like death and taxes – an inevitable part of life.  However, the insurance companies are well-schooled at finding the consumer’s weak spot, creating add-ons to coverage to fit said weakness, and marketing the heck out of it via television, print, and internet ads.  In the end, most people purchase based on emotion – not logic.  However, you will be able to purchase based on logic since I’ve done the legwork to figure out what is truly needed vs. what is just great marketing.  Below are the features that are important, as well as the ones I feel are unnecessary.

Important Features

Liability for Bodily Injury: This is necessary and it is required by the law.  However, the amount of liability coverage you purchase depends on your personal situation.

Liability for Property Damage:  I recommend this coverage as it pays for any damage that the driver causes to someone else’s property.

Medical Payments and Personal Injury Protection (PIP):  I recommend these features under certain conditions.  If a person does not have health insurance, or has very limited health insurance, they should purchase Medical Payments coverage.  However, if a person is in a “No Fault” state, then they don’t need to purchase Medical Payments coverage as it is included in the basic policy.  As with Medical Payments, if a person does not have health insurance, or has very limited health insurance, they should purchase PIP coverage.

Uninsured Motorist Coverage:  Even if it’s not required by the state you live in, this is coverage you definitely want to have in the event of an accident with an uninsured (or underinsured) driver.       

Towing & Rental Car Reimbursement: Typically, the premium for this coverage isn’t that much, and it can be very convenient to have.

Collision:  I recommend this coverage for anyone that is driving a new car or a car that still has a decent market value.  If you borrowed money to buy the car, this coverage is required by the lender.

Comprehensive:  I recommend this coverage for anyone with a new car.  The insurer will only pay what the car is worth though, so depending on the age/value of the car, this coverage may not be necessary.

Unnecessary Features

Accident Forgiveness:  If you’re a careful driver, the regular premium increase after your first accident most likely will be less (if there’s an increase at all) than the premium you pay for this coverage.

New Car Replacement: You’re only covered by this if your car is totaled.

Insurance companies are always coming out with new features.  It is important to carefully review what exactly is being covered, what limitations exist, and what the cost would be to you if you were uninsured for it vs. if you were insured.

Would you like a review of your current insurance, from someone other than your insurance agent?  Call me to schedule your free consultation- 913.693.7918.

John P. Chladek, MBA, CFP® is the President of Chladek Wealth Management, LLC, a fee-only financial planning and investment management firm specializing in helping families and couples who are not yet retired realize their financial goals.  For more information, visit

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