Last week, a friend asked me a question regarding her car insurance. She said “I know you’re all about getting the best deal and saving money. I have a question about my car insurance. My Chevy Malibu is now 8 years old. Is it worth keeping full coverage (collision and comprehensive), or should I drop them and just keep basic liability coverage?”

Well, I’m no insurance expert, but I do like to save money whenever possible. Generally, a car that old does not have enough remaining value to justify the higher premiums for collision and comprehensive auto insurance coverage. However, her current financial situation is a bit precarious. She’s currently unemployed and thus would not be able to afford to replace her car if it were damaged or destroyed. So, I advised her to keep her collision and comprehensive insurance coverage with a deductible of at least $500. I would certainly keep uninsured and underinsured motorist coverage. These days, more drivers than ever have no insurance. Their numbers are increasing as the economy worsens. You don’t want to be their next victim.

I also told her to shop around for the best deals on car insurance. Rates vary greatly between companies. I advised getting quotes from the majors: State Farm, Progressive, Geico, Nationwide, and Allstate. Also, check with a few independent agents to see what they can come up with. Shop and compare rates as well as coverage and service. A cheap premium is worthless if your policy is written by a no-name company who won’t be there when you need to file a claim. As with everything you buy, the best deals go to the wise shoppers who do their homework. Auto insurance is no exception.