Determining How much Auto insurance Coverage You need
The 3 Basic Parts To An Auto insurance Policy
1: Other Party:
Auto insurance Bodily Injury (BI) Liability and Property Damage (PD) coverage is Legally needed in the majority of states today. (BI & PD) The majority of people understand that they need BI & PD, but they have no idea the way to figure out how much coverage they need.
Try this simple question: Suppose your car was in an auto accident tonight where heaven forbid, another person was injured or killed? Keep in mind, everything you own is in the back seat of the car together with you and is at risk in a lawsuit! Therefore, what do you think their family would sue you for? $15,000? $25,000? $100,000 or even a Million dollars! Where would you get the money to pay them?
Maybe the Equity in your Home would help? How about your Savings and/or Investments? You could actually have as much as 25% of your wages attached to pay the award in almost all states! Are you ready to sacrifice everything you own to pay an award due to this accident? If not, read on for how to pick the auto insurance coverage you need.
2: You and Your Family:
Right now let’s turn the aforementioned accident around. For some unfortunate reason, you or a loved one is the one who is injured or killed in an auto accident. Where would you get the money if the person who hit you didn’t have auto insurance or not enough auto insurance? Medical bills could be covered if you have health insurance. But health insurance does not cover loss of life, pain and suffering or permanent disability.
Maybe you have a life insurance policy through your employer or your own individual life policy. Is the benefit amount adequate to cover your family if your loved one is killed? But even though you have life insurance, what pays for the misery, the pain and suffering, maybe the fact you or a loved one can’t walk or use their arms again?
You might have a disability insurance policy via your work if you’re lucky or had good financial advice. But disability insurance doesn’t pay for loss of life, pain and suffering, permanent loss of your legs, arm or hand.
The sole coverage which covers these things is a part of an auto insurance policy known as Un/Under-insured motorist coverage. You can just buy as much coverage here as you have in Liability coverage. Your auto insurance agent ought to manage to aid you determine the exact amount you need.
3: Your Car
Comprehensive and Collision Coverage are the third part of an auto insurance policy and are at times referred to as “Full coverage.” Basically the difference is this: If you run into the tree, you’re covered by Collision coverage. If the tree runs into you (hypothetically obviously), then you are covered by comprehensive coverage. Comprehensive likewise covers broken windshields, fire, theft and vandalism. The higher deductible (risk) you take here, the lower the premium. Make use of the savings here to purchase higher limits in the coverages that protect your assets and your family.
The bottom line to determining proper auto insurance coverage is, needless to say, the money available in your household budget. A great place to start in determining the proper auto insurance coverage for your family is to meet with your local auto insurance agent.
Most cut-rate companies concern themselves with one thing only: Price. Tell them what coverage you have and they are going to find out if they can provide you with the same coverage for less. You become the insurance professional. If this is the sole need you have then that’s ok. Otherwise, you need to seek the advice of a professional to assist you figure out the proper amount of coverage you need and how best to accomplish it.
Review these tips for auto insurance coverage to make sure you have enough to protect your family.
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