How to tell if you have the right amount of auto insurance
Thousands of drivers are on the road, commercials caution us against road rage, and hundreds of auto insurance companies are vying to get us to purchase through their company. We’re cautioned us against drivers who multi-task – talk on the cell, eat, primp, and jot down notes – and we’re warned about staged rear-end car accidents.
There are many terms to understand: basic types of auto insurance, liability coverage, underinsured motorist, and uninsured motorist. There terms are endless and deciding the right amount of auto insurance seems difficult.
How do you know if you have the right amount of auto insurance?
1. Consider liability against lawsuits:
As with homeowner’s insurance, automobile insurance is a safety net in case of a lawsuit. So, you need to make sure you have enough bodily injury liability insurance to cover your assets.
You’ll need to check with your state to see what the minimum liability protection coverage is, and then assess whether you need to add more coverage for your own assets.
Property damage liability insurance covers damage done by your car to another person’s car. Eric Tyson in “Personal Finance for Dummies,” (2006) says that $50, 000 is recommended as a good minimum to begin your coverage.
2. Think about uninsured or underinsured motorist liability:
If you happen to be in an auto accident and the other driver doesn’t have liability protection or enough to cover, you can collect for loss of wages, medical expenses, and pain and suffering you have incurred if you have uninsured or underinsured motorist liability coverage on your auto protection plan.
If you have passengers in your car who don’t have medical and disability coverage, uninsured or underinsured motorist liability will cover your passengers medical. You should consider whether or not to obtain uninsured or underinsured motorist liability based on your feelings about covering your passengers and having insurance if the other motorist does not.
3. If you have teenagers:
If you have teenage drivers in your household, you need to carefully consider the amount of coverage you elect to choose. Auto accidents are the number one cause of death for teens. So if you have teens, consider whether or not you should increase your liability and uninsured or underinsured motorist liability coverage.
4. Added costs auto insurances like to offer
Most of the time, you won’t need all the extra additional frills insurance companies like to offer: rental car reimbursement, towing, roadside assistance.
If you belong to an automobile club, you’ll already have these extra amenities covered. You’re automobile club will be less of a hassle to use in such emergencies while your insurance company will require claims and will usually not reimburse you for your total fees.
So consider not accepting the added frills and save some money.
In the end, additional liability coverage will add extra costs to your auto insurance. However, the extra costs of the additional coverage is worth the ease of any pain, stress, or financial hardships you may have to undergo if you’re in an auto accident and don’t have enough coverage.
For Additional Research Visit:
~Dummies.com: you’ll find beneficial information under “Understanding Auto Insurance”
~Howstuffworks.com: Look under “How Car Insurance Works.” More details and suggestions are offered to help breakdown the cumbersome information in choosing an auto policy