Underinsured drivers are another problem. These are drivers who have only the minimum state-required limits of liability on their auto insurance, which may not necessarily provide enough coverage to adequately compensate others involved in the accident.

"Despite the fact that you are the victim if an uninsured driver slams into your car, you are obligated to pay the deductible and your auto insurance will be used to cover repairs, as well as other expenses," said Carolyn Gorman, vice president of the Insurance Information Institute, a nonprofit education organization.

For example, since the other driver's insurance will not cover a replacement rental car, you could be stuck without transportation while your car is being repaired or you are waiting for authorization to get a new one. But, if your policy includes replacement rental car coverage, which is only a couple dollars a month, you can get a rental car right away.

Since the average car is in the repair shop for two weeks after an accident, renting a car can be very expensive. Based on the average daily rate for a rental car, it can end up costing more in most cities to rent a car for one day than for a full year of coverage.

Gorman added that many drivers think they are well prepared to deal with an accident, but not many of them have ever read their insurance policy. "Taking just a few minutes once a year to read your policy or talk to your insurance agent can go a long way."

More information is available at www.wiserdrivers.com.