The annual auto policy review

Auto policies renew automatically, which is convenient and means the coverage was set by circumstances that may no longer apply.

Start with the declarations page

The one or two page summary listing vehicles, drivers, coverages, limits, deductibles and premium.

Read every line. Most people have never done this.

Vehicles and drivers

Are all vehicles listed, and only vehicles you own?

Are all household drivers listed? A licensed driver in the household with access to the vehicles generally must be.

Should anyone be removed — a child who has moved out and insured their own vehicle, a former partner?

Is the garaging address correct? Rating is location-sensitive and an outdated address can both misprice the policy and create a coverage issue.

Is the annual mileage estimate accurate? Commuting patterns change.

Is the use classification correct — pleasure, commute, business? Business use, including delivery and rideshare work, generally requires disclosure and frequently an endorsement.

Liability limits

The most important item and the one most commonly left at whatever it was.

Compare your limits against your assets and future income.

State minimums are inadequate almost everywhere. 100/300/100 is a reasonable floor and 250/500/100 or higher is frequently appropriate.

The cost of increasing them is much lower than people expect.

Uninsured and underinsured motorist

Do you have it, and at what limits?

This covers your injuries when the at-fault driver has no insurance or inadequate limits, which is a substantial share of drivers.

Carry it at limits matching your liability coverage.

Check the property damage variant too, where available.

Medical payments or personal injury protection

Depending on your state.

Check the limit against your health insurance deductible, since this coverage can fill it after an accident.

In no-fault states, personal injury protection is the primary source for your own injury costs and the limits and options vary considerably.

Deductibles

Comprehensive and collision deductibles.

Ask whether raising them makes sense, given your savings and the premium difference.

Ask the reverse question too. Someone whose financial position has tightened may want a lower deductible even at higher premium.

Whether collision and comprehensive still make sense

On older vehicles, compare the annual premium for both against the vehicle's value less the deductible.

Where the premium approaches ten percent of the value, dropping them is worth considering — provided you own the vehicle outright and could replace it from savings.

Gap coverage

Do you owe more on any vehicle than it is worth?

If so, gap coverage matters. If a loan has been paid down below the vehicle's value, the coverage may no longer be needed and can be removed.

The optional coverages

Rental reimbursement, which is inexpensive and increasingly useful given repair times.

Roadside assistance, which may duplicate a motoring club membership or credit card benefit.

Original equipment parts coverage, worth considering on newer vehicles.

New car replacement, on recent purchases.

Custom equipment coverage, if you have added anything of value.

Discounts

Ask what you are receiving and what you might qualify for now.

Multi-policy. Multi-vehicle. Safe driver. Good student. Student away at school. Defensive driving course. Vehicle safety features. Anti-theft. Paid in full. Paperless. Low mileage. Telematics. Affinity discounts through employer, professional body or alumni association.

Circumstances change and discounts are not applied retroactively or automatically.

Check for aged-off items

Accidents and violations typically affect rating for three to five years.

If something is due to age off, confirm your rate reflects it — and shop the policy, since a fresh quote elsewhere may recognize the improvement more fully than a renewal does.

The umbrella question

Do you have one? Should you?

If yes, does the auto policy still meet the umbrella's required underlying limits? Reducing auto limits below the requirement creates a gap the umbrella will not fill.

Then shop it

Every two to three years, or after any significant change.

Same coverage, same limits, same deductibles, three or more quotes, on the same day.

Rating models differ enough between insurers that identical drivers receive substantially different prices.

The order of priority

If money is tight, the order to economize is: raise deductibles first; drop collision and comprehensive on old vehicles; remove duplicated optional coverages.

Never economize on liability limits or on uninsured motorist coverage. Those are the coverages that protect everything else you own.

General information about insurance, not insurance advice. Coverage options, requirements and rating practices vary by state and insurer. Consult a licensed agent about your specific situation.