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What is the Right Amount of Car Insurance ?
By admin | September 15, 2007
After the hunt for a new car ends, then you have to decide how much insurance you are going to put on it. While in most states it is illegal not to carry any coverage at all, most of the times you can choose how much you want to carry based on your own individual needs.
At the very bare minimum, you likely will need to have bodily injury liability coverage as well as property damage liability coverage. The amounts of coverage themselves can vary once again however you must at least have some.
After that, in some states or regions you will also need to have minimum amounts of personal injury protection as well as uninsured motorist coverage.
The important thing to consider however is that if you only purchase the minimum amounts needed in all of these coverage areas, that may satisfy all the legal requirements that come with having a vehicle however it most likely will not satisfy what you need in order to feel safe driving your car on the road.
Below are the various coverage areas and what they will mean to you. Consider whether it will be worth your while to increase your coverage on them. You know yourself better than anyone else so you will likely be best able to determine which areas you should have more coverage and which you should have less.
Remember too that most automobile insurance companies will allow you to increase your coverage liability if you so choose to later on.
Bodily Injury Liability
If you got into an accident and were at fault, if you don’t have enough coverage in this area under your auto policy, they could then go after your other valuable assets such as your house (assuming you are at fault in the accident). Most agents will recommend that you carry a minimum of $100 000 per person and $300 000 per accident.
Property Damage Liability
Not having enough property damage liability could also put your other assets at risk should you get into a severe accident when you are at fault. A general recommendation is $50 000 for this section.
Personal Injury Protection
This coverage is important if you regularly travel with those who are not in your immediate family. Most individuals on a good health insurance plan will get covered for medical costs, however that plan will not cover if someone is in your vehicle and gets hurt who is not part of your family. $10 000 is the minimum recommendation here.
Collision Coverage & Comprehensive Coverage
Collision coverage will pay for any damages that occur to your car by another vehicle or object. The newer your car (or more expensive), likely the more coverage you will want in this area. If your car is very old and isn’t worth that much to begin with, it may not be worth your money to carry this type of coverage.
Comprehensive Coverage
Comprehensive coverage will pay for any damages to your car that result from things such as fire, theft, vandalism and so on. You can assess how much of this you want to carry based on the neighbourhood and region you live in and travel to frequently as well as how expensive it would be to repair your vehicle on your own (the more expensive it is, the more likely you will want this coverage).
Uninsured Motorist Coverage
The final factor to consider is uninsured motor coverage. The need for this will vary by state so it’s important to look into your current area’s policies. If you live in a state with no-fault insurance, then you can skip this coverage; however if you don’t, the minimum amounts recommended are $100 000 per person and $300 000 per accident.
So when you go to purchase your auto insurance coverage policies, keep these factors in mind. The more driving you do the higher coverage you will likely want as well because just being out on the road more puts you at a higher risk for becoming involved in a collision, be it your fault or someone else’s.
Topics: insurance |
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