How much hard earned money have you spent on car insurance? Probably quite a bit. Every state requires drivers to enroll in a minimum amount of coverage, which is a good thing, but if you want to be fully protected it can be very expensive. This leaves most of us with the unsettling gamble of being under-insured or the money pit of being over-insured.

What if auto insurance were a more personal and tailored product, like a suit? We take the basic coverage of liability and mold it to the needs of the individual. Here are a few ideas that deserve some reflection and thought.

Pay as You Drive

A new idea in auto insurance is to pay as you go. Insurance companies already take your annual mileage and location into consideration but this would be more exact, more detailed and arguably a bit too personal. Pay as you drive works by outfitting the insured vehicle with a GPS-style tracking devicethat downloads mileage, time, and destination information to be used to calculate the premium. Now some people claim this is an invasion of privacy and no one’s business, especially an insurance company’s. Then there are others that drive very little that would welcome this change of calculated insurance. It would be perfect and much more affordable for those who don’t drive often but who also enjoy the security of full coverage.

Insure by Part

Insurance has long embraced the concept of insuring custom parts on vehicles; maybe they got that idea from the insurance companies that insure the various body parts of celebrities. But instead of just insuring customizations they should try customizing the coverage. Insuring car parts like new tires or rims, stereos, windows, body, paint whatever. The list goes on. As long as the insured already had liability they could then pick and choose what parts of their car would be covered in an accident. This again would afford the customer peace of mind and a more affordable auto insurance premium.

Location is Everything

It is true that insurance companies use complex mathematical formulas to calculate premiums and it is also true that one of the factors they consider is where the vehicle is parked. Cars parked on the street in Downtown Scary Town have a larger premium than those cars tucked away in a secure garage in a quiet gated community. But what if the consumer had that choice? Maybe for someone living in a city theft is the biggest concern and not collision so they could reduce their collision coverage and up the theft coverage, or vandalism coverage. The chances of car in downtown San Francisco being sucked up by a tornado are nil but you bet your flying monkey that everyone in Kansas would jump at the chance to have “tornado coverage”.

Like I said, auto insurance is a complex and often confusing business. It might be easier to understand if we consumers had more of a say in what our needs are. Then instead of asking your insurance company if you’re covered after an accident, you would know because you chose every aspect of coverage. This would give customers instant comfort and reduced stress when the need to make a claim arises.