Even for people with stellar driving records, auto insurance premiums can take a bite out of everyone’s pocketbook. Understanding what each element of your coverage means is the key to saving money while ensuring you have a tailor-made policy that’s exactly the right fit for you.
Liability. While this coverage is required by law, the minimum amount varies by state. Liability insurance protects you in the event you are held responsible for bodily injury or property damage to another party. Sage advice is to carry a bodily injury liability policy with a minimum of $100,000 per person/$300,000 per accident (with the addition of enough property damage liability coverage to cover the cost of a new car). Considering all the potential costs of chaos, from medical bills to potential lawsuits, it’s often recommended to increase your limits to $250,000 per person/$500,000 per accident to be on the safe side.
Collision. This type of insurance is not required by law, but it covers the cost of damage to your car after an accident. Depending on the current resale value of your car, collision coverage may not make sense for you to carry, since you’ll be paying more than what your car is worth.
Comprehensive. This coverage protects you from things that aren’t included under collision, such as fire or theft. If you lease a car, this coverage may be required, but most vehicle owners choose to add this coverage anyway, since it is often inexpensive and covers virtually any type of damage to the vehicle.
Deductibles. The higher the deductible, the lower the premium. If you have a decent savings fund, are a good driver and are willing to assume the risk, paying less for your premium may make sense for you.
We’re here to help steer you in the right direction! Make an appointment today to review your auto policy. Let’s work together to meet your financial goals and match your coverage preferences and requirements.