Time is no friend to the car owner. Unlike many assets, a car’s value generally decreases over time. This is called depreciation.

While it’s an expensive part of the total cost of owning a car, you only feel the effect when you sell or trade it in. Here’s a primer on what depreciation means for you as a car owner and how you can manage it.

New-car depreciation

Depreciation begins as soon as you drive off the lot.

Your car’s value decreases around 20% to 30% by the end of the first year. From years two to six, depreciation ranges from 15% to 18% per year, according to recent data from Black Book, which tracks used-car pricing. As a rule of thumb, in five years, cars lose 60% or more of their initial value.

However, not all vehicles depreciate at the same rate, meaning certain makes or models hold their value better than others. And depreciation rates can also change over time.

For instance, when gas prices spike, the value of large SUVs or pickup trucks may plummet, because fewer buyers are willing to pay for a gas guzzler. Or, when returned lease vehicles flood the market, depreciation rates on those models can accelerate because there’s such a large supply of them.

In fact, leasing offers another helpful way to think about depreciation. When you lease a car, the price is based on the portion of the car’s value that you’ll use, which is essentially the depreciation.

The residual value is what the car will be worth when you’ve finished your lease term. After three years, cars generally have residual values of around 40% to 60% of their original price (though the market value may be higher).

Strategies to manage depreciation

This decline in the value of vehicles may seem dramatic, but there are strategies to reduce or manage depreciation on the cars you drive.


A brand-new car will depreciate the most because of the steep first-year drop. Buying a car that is just one year old avoids this first hit from depreciation and saves you a significant amount of money on a nearly new car. And, of course, waiting past the three-year mark could save the owner around half of the car’s original price.

» MORE: Compare the costs: Buying a new car vs. used


Savvy new-car shoppers can find exceptions to the depreciation curve. For instance, the Chevrolet Colorado lost only 7% of value in the first year in 2016, according to an analysis by iSeeCars, which aggregates used-car listings. Or used-car shoppers can look for steep discounts, like the Volvo S60, which had a 34.4% first-year depreciation drop in 2016, shaving off around $14,000 in just one year.

You can use tools like Kelley Blue Book’s five-year cost to own or Edmunds.com’s true cost to own calculators to research how much specific models typically depreciate.


You don’t have to buy a car to drive one. When you lease, you basically pay for the car’s depreciation, plus tax and interest. At the end of the lease term, you can simply turn the car in — you don’t have to worry about selling it at a loss if your vehicle’s value has unexpectedly plummeted.

On the flip side, because the purchase price at the end of the lease is guaranteed at the beginning of the contract, you could also get lucky. If at the end of the lease, the car’s resale value is worth more than its residual value in your leasing contract, you can decide to buy it and keep it or resell it for a profit.

But leasing may not be your preferred option if you like the stability of owning and don’t want to return a car every few years. Consider whether leasing makes sense for you, and use NerdWallet’s lease calculator to help you estimate payments and negotiate confidently.


Creative add-ons — like noisy mufflers for race enthusiasts or black aftermarket rims — may be fun, but they can reduce your car’s value. Customization shrinks the pool of prospective buyers to those with your exact tastes. Furthermore, potential buyers might worry about whether the modifications were correctly performed or if they could signal potential mechanical issues.

Your car’s color can also affect the resale value. Flashy yellows, reds and purples may show off your personality and stand out on the road, but are harder to resell. If you anticipate selling or trading in later, stick with colors that are more widely popular.


Regularly servicing your car and keeping all records can prevent your car from depreciating as quickly as a haphazardly maintained car of the same model and year. These two steps move you to the head of the class when it’s time to sell. They demonstrate to prospective buyers that you were a responsible owner, increasing your car’s resale value.


There are two main ways to sell your car: trading it in to a dealership, or selling it to a private buyer. If you trade in, you’ll be offered a below-market price, since dealers take on the costs of reconditioning and then reselling your car. There are steps you can take to maximize the value of your trade-in, but you’ll often get the best price by selling your car privately. If you don’t mind the extra work and time it takes to prep your car and meet with buyers, this can take a significant bite out of your depreciation hit.

Should you ever buy a new car?

Despite that 20% to 30% drop in a car’s value in the first year, there are still reasons to consider buying new.

As opposed to buying used, it’s often easier to negotiate the initial purchase price, and new car loans tend to get the best rates. Plus, to get new models out the door, automakers may provide car-buying incentives that can significantly cut the sticker price. Finally, you don’t have to worry about a new car’s condition, and new cars come with warranties, making them potentially easier and cheaper to maintain.

And ultimately, if you plan to drive your car until the wheels fall off, you’ll have used all of the car’s value, and depreciation won’t be as much of an issue.

Insurance is designed to offer peace of mind, but there’s a reason your policy has all that fine print: You might not have the coverage you expect. Like any other insurance policy, renters insurance has exclusions, and knowing about them ahead of time can help you avoid unexpected bills in a disaster.

Just as important, though, is knowing what is covered. All that fine print in your policy likely includes coverage you might not expect, which could save you money down the line.

Covered: Belongings outside your home

Most renters know insurance covers personal belongings within their home but may not realize their things are probably covered off-premises too, including when traveling. Barbara Madvin, an insurance agent at Gaspar Insurance Services, says vehicle break-ins are some of the most common insurance claims she sees for renters. While damage to the car itself is generally covered by your auto policy, your renters insurance pays for items stolen from the vehicle, as long as their value exceeds your deductible.

Your renters policy will also cover your belongings if you move them from your home to a storage unit, a friend’s house or anywhere else to protect them from a covered disaster. In the event of a wildfire or hurricane evacuation, this can be particularly valuable, according to Christine G. Barlow, a chartered property casualty underwriter. This coverage typically lasts 30 days.

Covered: Living expenses if your rental is uninhabitable

While your home is undergoing repairs due to a fire or other covered disaster, your insurance company will usually pay for you to maintain your normal standard of living somewhere else.

A “normal standard of living” is broader than you might think. For instance, if you live in a rental home with a pool that you use every day, “the carrier needs to put you someplace where you have access to a swimming pool,” says Barlow, who is also managing editor at FC&S Expert Coverage Interpretation, a trade publication. If you have pets, your insurer should find you pet-friendly accommodations or board the animals where you normally would.

Not covered: Common disasters

Most renters insurance covers your possessions only in the case of specific scenarios, or “named perils” listed in the policy — things like fire, theft and wind. “If something’s not mentioned in that list, then there’s no coverage,” Barlow says.

For example, flood damage is almost always excluded from renters policies and typically must be purchased separately. (One exception: USAA, which serves military families, includes flood coverage with standard renters policies.)

Not covered: Brand-new stuff

Madvin recommends asking whether replacement cost coverage is included in your policy. If not, your belongings are covered only for their depreciated value, which often isn’t enough to buy brand-new replacements.

Say your 10-year-old TV is stolen and replacement cost isn’t included. “The carrier’s going to say, ‘OK, you paid $1,000 for it 10 years ago; we’ll give you $250 for it now,’” Madvin says. With replacement cost coverage, you’ll receive enough to purchase a new TV.

Not covered: Expensive valuables

Most renters policies cover jewelry and other costly items only up to a specific limit named in the policy, typically $1,000 to $2,000. So if you have an expensive engagement ring, for example, both Madvin and Barlow recommend adding separate coverage for it. An appraisal is usually required.

How to avoid surprises

Before buying renters insurance, take inventory of your belongings. “Most renters underestimate how much stuff they have,” Barlow says, which can leave a coverage gap. Barlow recommends using the Encircle app to upload photos of your belongings and estimate their worth. Other similar apps include Sortly and Allstate’s Digital Locker.

Read your policy thoroughly. Barlow suggests marking it with what’s covered in green and what isn’t in red. Madvin advises paying particular attention to the policy’s endorsements, which are typically add-ons or exclusions to standard coverage.

Confused by all the legalese? Turn to an expert. Talking through your options with an insurance agent or broker can ensure you understand the policy you’re buying. “Unless you really know insurance,” Barlow says, “it’s very easy to miss coverages that you need or to not realize something isn’t covered.”

If you’re tempted by the new benefits some Medicare Advantage plans are touting, the annual open enrollment season (Oct. 15 through Dec. 7) is the time to look. But finding a plan offering the benefits might be hard.

Medicare Advantage, also known as Medicare Part C, is administered by private insurers and offers the same Medicare Part A and Part B benefits as Original Medicare. Many plans also include limited dental, vision and hearing coverage, and even gym memberships.

Starting in 2019, new government rules have allowed Medicare Advantage plans to expand benefits even further. Commonly referred to as Special Supplemental Benefits for the Chronically Ill, or SSBCI,  the new benefits can go beyond strict medical care and provide support that can help improve and prolong a sick person’s life.

Government research shows that more than 70% of seniors live with at least one chronic illness, although eligibility rules for the new benefits also require “a high risk of hospitalization or other adverse health outcomes.”

These new rules open the door to coverage for adult day care services, home-based palliative care, in-home support services, caregiver support, non-opioid pain management, memory fitness services, home and bathroom safety devices and modifications, transportation, meal delivery, pest control, over-the-counter health items, virtual health services, acupuncture and others.

Additional support for chronically ill older adults is great news. But it’s important to remember that these supplemental benefits are just that, supplemental. A provider can decide which ones, if any, to offer, and the benefits are not available to everyone in a specific plan.

So far, insurers and consumers have been slow to embrace the new rules. Only an estimated 4.6% of plans are offering any new benefit, according to Brown University research published in May 2020.

Before you sign up for one of these expanded plans, be sure you know the limits involved, warns David Lipschutz, associate director/ senior policy attorney at the Center for Medicare Advocacy. Here’s what to keep in mind.

Understand what’s being offered

Benefits aren’t universally available

As part of the new rules, the government has altered what’s known as the “uniformity standard,” explains Lipschutz. Until now, Medicare Advantage plans had to offer the same benefits to all enrollees in a certain area, usually a county. So, if you’re eligible for twice-yearly dental checkups under your plan, so is everyone else enrolled in the plan.

For SSBCI benefits, however, insurers determine who qualifies. Grab bars, for instance, could be available only to patients who have already experienced a fall. Memory care may be reserved only for those patients diagnosed with a form of dementia.

It can be hard to determine if you qualify

You won’t know which, if any, of these new benefits you’ll receive until you are enrolled in a plan that offers them. That’s because the plan will need to confirm your diagnosis and determine if you meet the plan’s eligibility rules, something that can’t be done before you are a member.

This makes comparing plans difficult. Using Medicare.gov’s Plan Finder tool, you can determine what benefits are offered, but not if you will qualify. Keep in mind that agents, brokers or anyone else representing a plan can’t guarantee your eligibility. That includes customer service reps who answer the phone for an insurer, so, in this case, calling a plan directly won’t help much, says Lipschutz.

Check out limits

Each plan is allowed to determine how much of a given benefit it will cover. “We have found most to be fairly limited,” says Lipschutz. Services like meal delivery may be once a day for only a set period of weeks. Home-health aides may be limited to 12 visits a year.

To find out how the plans you are considering limit supplemental benefits, check the “Evidence of Coverage” document, which spells out coverage details. You can find this document on the insurer’s website or often through a link on Medicare.gov’s Plan Finder tool.

You can change your mind

If you find you’ve enrolled in a Medicare Advantage plan and you aren’t happy with it for whatever reason, you can change to another Medicare Advantage plan during the three-month Medicare Advantage open enrollment period starting Jan. 1 and ending March 31. This can be helpful if you signed up for a plan because of the supplemental benefits offered but once enrolled discover you don’t qualify for those benefits.

Be aware that you may change plans only once during this special enrollment period. This is different from the end-of-the-year open enrollment period (Oct. 15 – Dec. 7) when you may move back and forth between plans as much as you like.

From simple flat tires and dead batteries to serious multicar collisions, Lieutenant Matt Hamilton has seen hundreds of roadside emergencies in his 15 years as a post commander for the Ohio State Highway Patrol. His top priority? Making sure drivers stuck on the side of the road don’t make a bad situation worse by causing another accident or risking their lives trying to fix their car.

Here, Hamilton walks drivers through a step-by-step approach to handling common roadside emergencies, avoiding injury and getting assistance quickly when you’re stuck on the side of the road.

1. Get off of the road — ASAP.

If the car is still operable, I tell motorists to drive their vehicle out of the path of moving traffic. On an Interstate highway, drivers should pull over to the right shoulder and into the grass, if possible. But if crossing lanes of traffic to get to the right side of the road isn’t safe and if the left shoulder is wide enough, by all means, pull over to the left shoulder. The biggest priority is getting out of moving traffic. But if you’re on a bridge, don’t stop even if there’s a small shoulder. Exit the bridge, then pull over. The most important rule: Put as much distance as you safely can between your vehicle and the road to reduce the risk of injury or further accident.

Also, if you’re stranded, the smartest place for you to park is behind a guardrail because it provides the best protective buffer. One of the biggest mistakes I see people make is stopping in front of a guardrail, divider or wall. If another car strikes your car while it is parked on the side of the road, your car could get sandwiched between the other vehicle and this barrier.

2. GPS your location.

The highway patrol gets calls all the time from motorists who can’t tell us where they are. If a tow truck driver or officer has to search for you, you can count on being stuck for a while. It sounds like the most obvious advice in the world, but keep track of what road you’re on and the nearest exit or cross street. Before you call 911 or roadside services, use a smartphone navigation app or your car’s built-in navigation system to pinpoint your exact location.

3. Make your car highly visible.

As soon as you know your car is in trouble, turn on your emergency flashers. When you’re safely parked on the shoulder, place reflective warning triangles on the ground a few feet behind and in front of your car. Warning triangle kits are available at safety supply stores and meet visibility standards set by the U.S. Department of Transportation.

4. Call 911 if…

You’re broken down and at a dead stop in a lane of traffic and can’t get out of the path of moving cars. That’s an emergency—call 911. Turn on your flashers and stay in your car with your seat belt on until help arrives.

5. Call roadside service.

Check your auto insurance card for an 800 roadside assistance hotline number. Some car manufacturers also offer roadside assistance and towing, and that information may be listed in your owner’s manual.

Keep in mind: Highway patrol and police are not equipped to offer roadside services. They won’t fix your flat, but I do recommend calling the state highway patrol or local police to alert them. Time permitting, an officer may be able to stay with you until a tow truck arrives.

6. Stay in your vehicle.

Standing on the side of any road carries the risk of getting struck by a passing vehicle, which is why I always tell drivers to stay in their car while they’re waiting for a tow truck or roadside assistance. The only time it might be okay to get out of the vehicle on a highway is if you’re stopped behind a guardrail or another type of solid barrier that offers some measure of protection.

Common Roadside Emergencies

Some of the most common roadside emergencies are also mostly avoidable if you follow a regular, seasonal maintenance schedule for your vehicle and, at a minimum, have your tires and battery checked before any major road trips.

  • Battery failure
  • Flat tire
  • Keys locked in car
  • Empty gas tank

Roadside Emergency Essentials

Don’t leave home without these items in your car.

  • Fully-charged cell phone and car charger
  • Cell phone or built-in navigation app
  • Reflective warning triangle kit
  • Flashlight and batteries
  • Booster/jumper cables
  • First-aid supplies
  • Blankets

It’s as quick as a glance at a cellphone screen to see who’s calling or the instinct to reach and answer a ringing phone; as innocent as petting the furry, four-legged passenger traveling beside you; as mundane as hunt-and-pecking a street address into a G P S system between green lights. Distracted driving is the cause of nine deaths and more than 1,000 injuries every day in the U. S., according to the Centers for Disease Control and Prevention (CDC).

Although talking on a cellphone and texting while driving are often cited as examples of distracted driving, the science behind the real causes and results of distracted driving is a little more complex. Recent research in neuroscience confirms what many drivers may instinctively know but often forget: driving requires high-level brain power . In addition to processing large amounts of visual information (street signs, other drivers, road conditions), drivers also have to predict and react to what other drivers are doing and coordinate hand activity on the steering wheel with foot activity on the gas, brake and clutch. These are essential functions when driving.

Then there is the additional, non-essential multi-tasking, such as switching radio stations, talking to a passenger or yelling at another driver, or taking a sip of coffee. These activities and others like them can decrease the brain’s ability to handle essential functions for driving

A brain scan (below) shows the impact additional activity may have on the brain. In a distracted driving simulation conducted by Carnegie Mellon University’s Center for Cognitive Brain Imaging , participants were asked to listen and respond to sentences while driving. Researchers found that when drivers listened, activity in the area of the brain that processes space and movement decreased; instead, brain activity shifted to the frontal areas of the brain that handle language. The result? Drivers were less likely to see and more likely to hit objects in the simulation.

The Distracted Driver’s Brain

We Know From Experience

We’ve seen almost everything, so we know how to cover almost anything.

Count the number of distracted driving mistakes you may have committed

The C D C classifies driving distractions in three categories:

Cognitive distractions cause your mental focus to drift while driving. Examples include:

  • Talking to passengers in the car or on the phone
  • Paying attention to a child or pet traveling with you in the car
  • Driving while upset or angry (think: road rage)
  • Daydreaming or getting lost in thought
  • Thinking about problems at home or work
  • Driving under the influence of drugs or alcohol
  • Hands-free talking or voice-texting on a cell phone

Visual distractions cause your eyes to wander from the road. Examples include:

  • Changing the radio station or music selection on the car stereo
  • Looking at a map or adjusting the destination on a GPS device
  • Adjusting the air conditioning or heating temperature controls
  • Searching for items on the floor, passenger seat or back seat of the car
  • Applying or checking makeup in the rearview mirror
  • Checking out the view on a scenic drive
  • Turning to look at a traffic accident or police activity on the side of the road
  • Scrolling through email, social media accounts or other smartphone apps at a stop light


states ban all texting while driving. Montana and Arizona have no ban; Missouri has a partial ban on drivers 21 and younger.

Manual distractions cause you to take one or both of your hands off of the steering wheel. Examples include:

  • Eating or drinking, or cleaning up spilled food or drink
  • Smoking, or any activity related to smoking, such as finding and lighting a cigarette
  • Searching inside your wallet or purse for items, such as phone, makeup or gum
  • Touching the dials or buttons that control temperature, windows, mirrors, G P S destination or music selection
  • Reaching for items, such as food, C Ds, a cellphone, or using your hands to assist a child or pet
  • Securing a seatbelt (your own or a passenger’s)
  • Texting or talking on the phone without a hands-free device

You wouldn’t read a book while driving. Checking a text is no different.

Texting while driving hits all three categories of distracted driving—cognitive, visual and manual. In one study by the National Highway Traffic Safety Administration , drivers took their eyes off the road for an average of 4.6 seconds when sending or reading a text message. How does that level of distraction translate in the real world? Its like driving the length of a football field with your eyes closed, according to David Hosansky, author of the report “Distracted Driving: Should Driver Texting and Cellphone Use Be Banned?”

6 ways you can stop yourself from driving while distracted today

  1. Limit phone use while you’re driving — turn it off if necessary. Even hands-free calling and voice texting may increase the risk of an accident.
  2. Get a phone app that silences calls and texts while your car is in motion. Many of these apps send an auto-response notifying the sender that you’re driving.
  3. Driving is no time for multitasking. Avoid eating, glancing at your calendar, searching for items and anything else that takes your attention away from the road.
  4. Keep conversation light when talking to passengers. Save serious discussions or important news for another time.
  5. Make sure children and pets are properly secured in their seats before driving.
  6. Pull over and park in a safe spot before adjusting controls in your car, tending to a pet or child, sending a text or talking on your cellphone.

Steve Schreck and Drew Conkling know why excessive heat can ruin an engine — and a road trip.  As product managers at a major international auto parts manufacturer, their job is to oversee the development of cooling system components that go into millions of vehicles worldwide. Here, they provide tips on what to do when your car overheats and suggest basic car maintenance that can help prevent your car from overheating.

Your car is overheating. Now what?

Most cars are equipped with warning lights and a pressure relief valve, so if your engine starts to overheat, you’ll probably get advance warning before it damages the engine. But don’t keep driving. Important steps to follow when the warning light flashes are:

  1. Pull over.
  2. Turn off your engine.
  3. Call for help.

That’s it — stop there. “Don’t even think about touching the radiator cap while you’re waiting for a tow truck,” Schreck says. “The cooling system is highly pressurized. Just loosening the cap a little can set off a geyser of hot coolant.”

“Also, there’s nothing you can do from the side of the road,” says Conkling. “Your car needs to be towed to a professional.”

If towing to an auto shop is not an option and you have no choice but to take matters into your own hands, consider following these steps:

  1. Wait until the engine completely cools — at least 30 minutes.You might be able to speed up the cooling process if you can pop the hood with a latch located inside the car cabin. But, do not touch or attempt to open the hood until the engine is completely cool.
  2. Check the coolant/antifreeze reservoir.
    Typically, this reservoir is a translucent plastic tank near the radiator. If it’s empty or low on fluid, and you’ve allowed time for the engine to cool, refill the tank with new antifreeze.
  3. Check hoses for leaks or blockage.Chances are, if the coolant tank is completely empty or you spot a drip or puddle on the ground, you’ve got a leak.

This is why you need to know how your engine’s cooling system works

Technically, here’s what’s happening: Heat from your engine is absorbed by coolant (think: antifreeze), which the engine’s water pump pushes to the radiator, where it cools and is recirculated back to the engine.

The simple answer? “Think of the water pump as a human heart sending blood throughout the body — it keeps pumping coolant through the engine, then back again,” says Schreck. Although engines no longer use water for cooling, the term water pump is still used to describe the system that moves coolant through an engine.

The coolant — the fluid that flows through the cooling system — flows from the engine to the radiator, where heat gets released into the atmosphere. “That’s why the technical name for the radiator is the heat exchanger. It takes the heat out of the coolant,” says Conkling. “The coolant then flows back to the engine to grab more heat. It’s a continuous loop.”

This is what happens when it doesn’t work

When something goes wrong in the cooling system, all components in the engine run at a temperature that’s too high, Conkling says. “The engine and coolant heat up, and metal keeps expanding the hotter it gets.” Parts of the engine can warp or melt, resulting in costly repairs. Depending on the damage, you may even need a new engine.

Hot weather and blasting the AC aren’t causing the car to overheat

Conkling puts it this way: If you were speeding through Death Valley in 1973 with the AC blasting, turning it off and slowing your speed might help cool the engine. But modern cars are typically better designed to handle that kind of load, so when your instruments say the car is overheating, the cooling system may be malfunctioning. “No amount of letting it cool off in the shade is going to solve the problem.”

Chances are, you need a mechanic to tell you why the car is overheating

Why? Schreck explains, by way of a breakdown he experienced. “I had a 2005 car that started blowing coolant all over the road,” he recalls. “My mechanic ran a diagnostic test and found the issue was a small defect in the radiator cap. You’re not going to pinpoint something like that without testing on sophisticated equipment.” Three common reasons a car overheats:

Thermostat failure

The cooling system’s thermostat works like a heat-sensitive valve. When you start a car, coolant circulates in the engine until it reaches a certain temperature, then the thermostat opens the flow of coolant to the radiator, where heat is released. If the thermostat fails to open, the coolant circulates in the engine and gets hotter, which can lead to overheating.

Blocked airflow 

As you drive, air is constantly forced through the radiator. This airflow is what removes heat from the coolant and sends it into the atmosphere. Any buildup of material on the front or back side of the radiator (think: leaves, bugs, road debris, snow) can obstruct the flow of air.

Leaking water pump

Over time, coolant gets dirty and deteriorates, and rust and scale can build up in the fluid. This buildup degrades the seals in the pump and can be a common source of coolant leaks.

Pro tips to help prevent a car from overheating

Schreck and Conkling offer this advice for preventing a costly meltdown.

  • Coolant picks up dirt and particles that decrease its effectiveness. Coolant that looks cloudy or rusty needs to be replaced. Check the appearance of coolant at every oil change.
  • Regardless of how coolant looks, it should be replaced as often as recommended by the manufacturer of your car, typically every two to five years. (See your owner’s manual.)
  • Use the type of coolant specified by the manufacturer — as in chemical type, not merely brand. Each type contains a different blend of corrosion inhibitors; using the wrong one can damage your cooling system.
  • When in doubt, take your car to a professional. Full-service repair shops have access to the latest manufacturer recommendations and have all types of coolant on hand.

If you drive for a ridesharing company, such as Uber or Lyft, you might already be aware that a personal car insurance policy typically does not cover “business use” of your vehicle. In other words, if you’re in a car accident while you’re on the clock, you could end up paying out of pocket for expenses such as vehicle repairs or an injured person’s medical bills.

Most ride-share companies are required by state law to provide insurance for their drivers. But, if you use your vehicle for both personal and business purposes, you might want to consider additional coverage to help protect it. Here are some things to keep in mind about ridesharing insurance — sometimes referred to as ride-hailing insurance — and the types of scenarios it may help cover.


Some insurers offer a ride-hailing insurance endorsement you can add to your existing personal car insurance policy. If you drive for a ridesharing company (sometimes called a transportation network company, or TNC), the extra coverage offered by this endorsement may help fill gaps between the TNC’s commercial policy and your personal auto insurance policy.

Another option may be a full ridesharing insurance policy, which combines both personal and business coverage into one auto policy.

Insurance premiums, coverage types and policy limits may differ among insurers, and the available coverage will also vary by state. Your insurance agent can explain what options are available in your area.


According to the National Association of Insurance Commissioners (NAIC), the major TNCs provide limited commercial insurance for their drivers who are using their personal cars for the TNC’s business. Business use may include times when the driver is en route to pick up a passenger or has a passenger in the vehicle.

But, since personal car insurance generally excludes all business use, the driver may not be covered by either policy when he is available for hire but has not yet accepted a ride request, the NAIC says. A ridesharing endorsement may help fill that coverage gap. It extends certain coverages on your personal policy so that they apply during the “app on” period when you’re waiting for a ride request.

So, if an accident occurs while you’re waiting to be hired, the ridesharing endorsement may help prevent you from paying out of pocket for related expenses. Keep in mind, however, that if you don’t have collision coverage on your personal policy, you will not have it under the endorsement, either. In that case, you would still have to pay for the full cost of repairs to your own vehicle if you have an accident while you’re waiting for a ride request to come in. Similarly, if you don’t have comprehensive coverage on your personal policy, you also will not have it under the ridesharing endorsement.


A ridesharing endorsement may also help reduce your out-of-pocket expenses when it comes to paying a TNC policy’s high deductible. Though some TNCs provide commercial insurance for drivers, if you get into an accident while driving for the company, you’ll likely have to pay the TNC policy’s deductible.

A deductible is what you pay out of pocket toward a covered claim. Collision coverage and comprehensive coverage each have separate deductibles. On a personal auto insurance policy, you may be able to select your collision and comprehensive deductibles — for example, $500 each.

On the other hand, when you drive for a TNC under the protection of its commercial insurance policy, you may have to pay higher deductibles for collision and comprehensive coverage — for example, $1,000 or $2,500. If you’re involved in a covered collision while you’re on your way to pick up a passenger or have a passenger in the vehicle, you’d have to pay the TNC’s deductible out of pocket before commercial insurance benefits kick in to help repair your car.

A ridesharing insurance endorsement may help cover the gap between your personal auto policy’s deductible and the TNC policy’s deductible in this type of scenario. So, if your collision coverage deductible is $500, and the TNC’s collision coverage deductible is $1,000, the ridesharing endorsement may help pay the $500 difference.

If you’re thinking of becoming a rideshare driver for a service like Uber or Lyft, the Insurance Information Institute suggests that you discuss with your TNC its coverage types, limits and deductibles.

Once you know what coverage may be available through your ride-hailing company, you can talk to your agent about filling in any potential coverage gaps with a rideshare insurance endorsement.


The cost of rideshare insurance depends largely on what type of coverage you buy. For instance, a rideshare endorsement may cost less than a separate rideshare insurance policy that provides coverage independent of your regular car insurance policy.

As with most insurance coverages, the higher your limits, the more insurance is likely to cost. If you add a rideshare endorsement to your car insurance policy, you’ll typically find that your rideshare coverage limit is the same as the one you set for your personal car insurance policy. So, if you have a $100,000 liability limit on your regular policy, $100,000 is also the most your policy would pay toward a covered rideshare insurance claim. If you opt for a separate rideshare insurance policy, you’ll likely need to set limits for that policy.

A local insurance agent can let you know what types of coverage are available to you and give you a rideshare insurance quote. Then, once you have the coverage that fits your needs, you can offer rideshare services with greater peace of mind.

Auto liability insurance is a type of car insurance coverage that’s required by law in most states. If you cause a car accident — in other words, if you are liable for the accident — liability coverage helps pay for the other person’s expenses.

Auto liability coverage comes in two forms: bodily injury liability coverage and property damage liability coverage. Drivers in most states must have both types of coverage.


Many types of insurance policies include liability insurance. Generally speaking, it helps pay to repair another person’s property or for their medical bills if the policyholder is found responsible for causing the damage or injuries.

Auto liability insurance helps cover another person’s medical expenses and property damage via these two types of coverage:

Bodily injury liability coverage (sometimes abbreviated as “BI”)

  • If you’re at fault for an accident that injures another person, bodily injury liability coverage helps pay for their medical expenses. For instance, this coverage can help you avoid paying out of your own pocket for the injured person’s X-rays and treatment.

Property damage liability coverage (sometimes abbreviated as “PD”)

  • If you cause an accident that damages someone else’s property (their car, for example), property damage liability coverage helps pay for repairs. For example, if you rear-end another car, this coverage can help prevent you from paying out of pocket to repair the other driver’s vehicle.


The amount your insurer will pay for a covered liability insurance claim depends on the coverage limits you choose. Each state sets minimum coverage limits for bodily injury liability and property damage liability that drivers must purchase, but you may decide to buy additional coverage. You may see three liability coverage limits on your car insurance policy:

Property damage liability limit.

  • This is the maximum amount your insurer would pay to repair damage you cause to another party’s property. The maximum payout would not exceed the limit you’ve set.

Bodily injury liability limit per person.

  • This establishes a maximum payout for each individual who is injured in an accident that you cause.

Bodily injury liability limit per accident.

  • This sets a cap on the total amount that your insurance provider will pay out for all medical expenses other people incur from a single accident you cause. It’s important to set this limit at an amount that makes you comfortable, as it may be needed to help pay for the medical expenses incurred by multiple people.

Most insurers package bodily injury and property damage limits together. For example, you may be able to purchase auto liability coverage with limits like the following:

  • 25/50/10 ($25,000 BI per person limit, $50,000 BI per accident limit, $10,000 property damage limit)
  • 100/300/50 ($100,000 BI per person limit, $300,000 BI per accident limit, $50,000 property damage limit)

Your coverage limits will depend on the packages your insurer offers — in other words, you may not be able to choose standalone limits for bodily injury or property damage coverage.


The amount you’ll pay for liability insurance is based on a number of factors, including how much coverage you purchase. The higher your coverage limit, the more you’ll likely pay for liability insurance. Your insurance agent can tell you how much your coverage will cost if you adjust your limit.


Any costs that exceed your liability coverage limits are your responsibility — in other words, you’d have to pay them out of your own pocket. That’s why it may be a good idea to increase your auto liability limits above the state’s minimum requirements by purchasing more coverage.

Consider the following: You are at fault for a crash that injured three people in another car. Your bodily injury liability limit per person is $50,000 and your bodily injury limit per accident is $100,000. If Person 1’s medical bills total $40,000, Person 2’s cost $30,000 and Person 3’s cost $25,000, you’re likely covered. Each person’s bills were under $50,000 (your bodily injury limit per person), and the total cost of injuries is $95,000, which is lower than your $100,000 bodily injury limit for a single accident.

But suppose all three people had $50,000 in medical bills, totaling $150,000. In that case, your bodily injury liability coverage would pay $100,000 toward those bills, and you may need to cover the remaining $50,000 yourself.


Liability coverage typically doesn’t pay to repair damage to your own car after an accident — collision coverage helps with that. It also doesn’t pay to repair damage caused by other factors, such as hail, which may be paid by comprehensive coverage.

Liability coverage also does not extend to costs associated with your own injuries after an accident you cause. If you want this type of coverage, you may want to consider medical payments coverage. Your insurance agent can help answer questions about auto liability insurance or your state’s coverage requirements.

Talk to a local insurance agent to discuss your options and choose appropriate liability coverage limits for your situation.

Whether you’re new to Medicare or a beneficiary gearing up for the annual open enrollment period from Oct. 15 through Dec. 7, you’ll want to pay special attention to your prescription drug coverage.

Part D is the Medicare benefit that helps pay for prescription drugs and is administered by private insurers. People with Original Medicare (government-administered parts A and B) may purchase a stand-alone Part D plan to help with prescription drug costs.

The majority of Medicare Advantage plans, also administered by private insurance companies, include Medicare Part D prescription drug coverage. People who sign up for Medicare Advantage plans that do not provide Part D coverage may also purchase a stand-alone Part D plan.

In any case, it’s important to know the medicines that are covered and understand how the costs you pay for those medicines can vary from plan to plan.

What Medicare Part D covers

Medicare drug plans cover generic and brand-name drugs. All plans must meet a standard level of coverage set by Medicare. This means they must all cover the same categories of drugs, such as asthma or diabetes medicines, but plans can choose which specific drugs are covered in each drug category.

Each Medicare Part D plan lists the drugs it covers in what’s called a formulary. A specific formulary may not include your medicine but may include a similar option. You may want to consult with your doctor before your plan search to see what alternative medicines are feasible for you.

Like formularies, the cost of your drugs can vary from plan to plan depending on copays, tiered pricing and various restrictions discussed below. It’s important to research your coverage options thoroughly to find the plan that best fits your medical needs and your budget. “So often people just stick with the coverage they have even when there may be better, less expensive alternatives out there,” says Sue Greeno, advocate at the Center for Medicare Advocacy. These five steps can help you with your search.

1. Stay up to date with your current plan

Each year by early October, your plan will send you an Annual Notice of Change. This is also available on your insurer’s website. Greeno recommends everyone read this document carefully and check for the following critical information:Changes in the drug formulary

Just because your Part D plan covers your medicines now doesn’t mean it will next year. Formularies change often. Check the Annual Notice of Change to determine if your insurer is dropping, substituting or restricting any of your prescription drugs.Changes in cost

Check to see if your plan is making any changes in the cost of the drugs it covers. Copays, coinsurance and deductibles can all change. Most plans have tiered copays, charging more for brand-name drugs than generics, for example. Check if any of the medicines you are taking have changed tiers and how that will affect your out-of-pocket costs.

If you have any questions about the Annual Notice of Change, contact your insurer directly.

2. Use the Medicare.gov Plan Finder

Because plans can change each year and because new plans become available each year, it makes sense to shop for the best Part D coverage for you during each annual Medicare open enrollment period.

The Medicare.gov Plan Finder can help. The Centers for Medicare & Medicaid Services has added new features in the Plan Finder tool that make it easier to determine if your medicines are covered, what pharmacies are in network near you and what your total out-of-pocket costs will be including copays and deductibles.

These pro tips can help you navigate the Plan Finder:Enter your drugs

Whether you’re searching stand-alone Part D plans or Medicare Advantage plans (or both), the Plan Finder tool allows you to enter each of your medicines. If you have a My Medicare account, the drugs you have already entered will be entered again automatically.

When the list of available plans pops up, it will automatically sort your options in order of lowest to highest total drug costs including premiums. You can search within the plans that come up in your search to see if your drugs are covered and at what price.

Note: Just because you enter the drugs you are taking doesn’t mean that the plans that appear in the search necessarily cover all of them. You need to dig deeper into the search results to confirm that your medicines are covered in each of the plans in your search.Choose your pharmacies

When you enter your medicines, you’ll also be asked to search for up to five pharmacies nearby. You can include mail order as one of your options. The tool allows you to search pharmacies by name, but it will also automatically provide a list of nearby in-network pharmacies. An interactive map allows you to check pharmacies farther from you that may offer lower prices. Drug copays can vary significantly from pharmacy to pharmacy, so you’ll want to take advantage of this tool, Greeno says.Compare Part D vs. Medicare Advantage

You can use the link at the top of your Plan Finder page to toggle back and forth between stand-alone Part D coverage and Medicare Advantage Part D coverage in your area. This makes it easier to compare Original Medicare (Part A and Part B) with Part D coverage to Medicare Advantage plans.

Note: Be aware that the premium and deductible numbers you see on the Medicare Advantage link relate only to drug coverage. These numbers do not include the premiums or deductibles for general health care, which are listed separately.Check for pricing tiers

Many plans have tiered pricing, charging more in copays for brand-name drugs and still more for categories of expensive drugs. There are also tiers for special needs drugs and the new, less expensive pricing implemented for diabetes drugs. Tiers and costs for different types of drugs vary from plan to plan.

The tier system may enter into your price decision. If you take only generics with very low copays that don’t count toward your deductible, you may decide a low-premium, high-deductible plan is the most affordable option. Someone with expensive out-of-pocket prescription drug needs, however, may well opt for the lower deductible, slightly higher premium plan.

3. Look for other restrictions

In addition to tiered pricing, prescription drug coverage may come with other restrictions.Coverage caps

Some plans have coverage caps, or limits on how many pills of a certain medicine they’ll pay for each month and other volume restrictions. In most cases, this works fine. But some patients may find this restriction eliminates the less expensive bulk mail-order option.Step therapy

In 2019, Medicare Advantage plans were allowed to implement “step therapy.” With this strategy, patients must try cheaper medicines first before they are allowed to move to costlier drugs.

For many patients, lifestyle changes or less expensive but equally effective medicines can work as well as costlier therapies. But in other cases, step therapy can be a delay in getting the acute care a patient needs. That’s why it’s important to understand when step therapy is part of your plan.

4. Understand the exemption process

Many times patients will undergo an unexpected health change well into the calendar year that changes their prescription drug needs, which may include a medication not on their plan’s formulary. In other cases, patients may find a covered drug becomes ineffective, and they need to switch to a more expensive version or one that isn’t included in their plan’s formulary.

In these cases, with the help of their doctors, enrollees can file for an exemption. “In most cases insurers will grant the exemption,” Greeno says. But it is another hoop patients have to go through. Be sure to examine how this process works in the Part D plans you are considering.

5. Ask for help

Even people with modest drug needs can find comparing the various options challenging. You can get help with the process through your local State Health Insurance Assistance Program, so find the SHIP nearest you. Or, as Greeno suggests, check with your local senior center for help. Often staff can assist in open enrollment questions or will know a good resource. And, of course, keep in mind that all of these connections are virtual for the time being due to COVID-19.

Life insurance applications for Americans have jumped in 2020 as the COVID-19 pandemic has made us more aware of our own mortality.

No one has been more interested in their own life insurance gaps than the under-45 crowd. Application activity has grown almost twice as fast this year for Americans 44 and younger as for those 45-59, according to research through September from MIB Group, a data-sharing service for insurance companies.

Younger buyers are often first-time applicants, digging into the details to understand how life insurance works. If you’re looking for a policy, here’s how to ease your way through the application process and get the most out of your new coverage.

» MORE: Best life insurance companies for 2020

Plan for tomorrow, not today

Many young Americans are still near the beginning of their financial journeys. Jobs, homes, cities and relationships will likely change over the next decade, which means needs and dependencies may change too.

“The question of who needs life insurance is very personal, but an easy way to know if you need life insurance is to consider if someone would suffer financially if you were to pass away,” Faisa Stafford, president and CEO of industry group Life Happens, said in an email. “If the answer is yes, then you should consider life insurance.”

She recommends focusing on two main issues: replacing your income and repaying your debts if you die. That means thinking ahead to cover your growing financial commitments as your life changes.

For example, a new homeowner can skip mortgage protection insurance, which pays off your loan if you die, and choose a term life policy instead, suggests Roslyn Lash, a financial educator in North Carolina and author of “The 7 Fruits of Budgeting.” Your mortgage debt will shrink over time, but your life insurance benefit stays the same — so if you die, some of the money could be used for other priorities, such as sending a child to college.

Skip the medical exam while you can

Life insurance applications are notoriously frustrating. You might expect to fill out forms, explain medications and take a life insurance medical exam just to find out if you’re approved.

While this process is still out there, simpler options are now available. “The use of e-signature, no blood or urine tests, and online applications all have made life insurance more accessible to more people,” Stafford said.

In a growing practice called “accelerated underwriting,” many insurers now rely on your prescription drug use, data about you from MIB Group and electronic health records to speed the process, according to the Society of Actuaries.

Accelerated applications can cut approval times down from weeks to hours, according to the National Association of Insurance Commissioners, with no medical exam required. Young buyers are often the most likely to be approved, and there’s almost no downside. Most insurers will simply have you take a medical exam if you aren’t approved without one.

» MORE: Compare life insurance quotes

Don’t assume life insurance is expensive

Buying now rather than later can help you save money on life insurance, which makes sense: The older you get, the more risk you pose to your life insurance company. The result is that a policy for a 25-year-old is likely to be much less expensive than the same coverage for a 45-year-old.

Many millennials may not realize the value of buying life insurance while they’re young and healthy. Research by the life insurance trade group LIMRA shows that half of millennials overestimate the cost of coverage. Only 52% own life insurance, even though 80% recognize they need it, according to LIMRA.

But the 2020 pandemic is providing new motivation. In October, nearly 1 in 3 millennials said they feel an increased need for life insurance due to COVID-19, according to consumer research from LIMRA.

To get started, all you have to figure out is how much you need and for how long you need it. Think about the people who depend on you. How much money would they need to pay off the house? How long would they need to finish school or find a job?

Stafford suggested starting with a general guide to determine your coverage need: 10 times your annual salary. “But since finances are complicated, working with a financial professional can help you figure out how much coverage you need for your own personal situation,” she said.

This article was written by NerdWallet and was originally published by The Associated Press.