SMART MONEY: Auto insurance still a must, even if you don't own a car
May 26, 2013 2:50 AM

DEAR BRUCE: I no longer own a car. Occasionally, I’ll rent a car or borrow a friend’s car.

Do I need to carry any type of auto insurance?

My agent is advising me to purchase a policy to cover other drivers’ medical expenses and uninsured drivers. — V.L., via email

DEAR V.L.: First of all, how much insurance does the friend carry on his/her car? Very likely it’s not adequate. You should have a separate policy for several millions of dollars to cover your interests.

That policy should also cover the rental car for the additional several millions of dollars.

I don’t know what your agent is advising that the policy should cover, but the critical item, as I view it, is liability insurance.

The uninsured drivers coverage would certainly be a factor with regard to the borrowed car more so than the rented car. You should also have something in this excess policy that covers the rented car in the event of any accident that is your responsibility.

DEAR BRUCE: I am a 41-year-old married woman who wants to provide for my children’s future.

Please tell me how to get started: Is a Roth IRA or stocks a better way to start saving for my children? I think that I would get a better return from a Roth IRA.

My parents did not teach me anything about investing.

My husband and I are trying to pay down our debt as quick as possible, but I want to start something now for my children. — Reader, via email

DEAR READER: I don’t see any reason to start worrying about your children’s future separately. It’s a matter of having the savings in one pocket or another.

I think you are most wise to pay down your debt as quickly as possible.

There is certainly a lot to be said for investing as well, but the problem in today’s world is that, in all likelihood, you are paying more in interest for the debts you owe than you will earn on any investment kept separately.

Until that circumstance changes, I would concentrate on paying off the debt and worry about the children’s future later.

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