Buying Auto Insurance - How much is Enough?
Buying auto insurance can be tricky but there are some basic steps consumers can take to get the best deals. Your auto insurance strategy should start by making sure you understand just how much insurance coverage you need. This might depend on the laws in the state where you live. Write down the types of coverage required by state law as well as any other kinds of coverage you think you might need.
Once you have an idea of the extras you might need you need to determine hoe cautious you need to be. Many people try to picture the worst that could happen when buying auto insurance. Don't forget that insurance companies have the inside track on this one. They know how likely you are to become involved in an accident as well as what the chances are of your car being stolen or vandalized. This information is contained in actuarial tables based on your age, model of car and occupation - for example.
So how do you know if you are buying too much auto insurance and how far should you venture beyond the minimum requirements for your state? Insurance experts suggest that if you own many assets you should make sure you have enough coverage to allow for their protection when buying auto insurance.
This means that if you have $100 000 in assets and only $50 000 in bodily injury liability coverage you could lose out if the accident is your fault and losses are more than $ 50 000. Consider this scenario when buying auto insurance.
It is recommended that your liability limits are $50,000 bodily injury liability for one person injured in an accident, $100,000 for all people injured in an accident and $25,000 property damage liability (that is, 50/100/25). Remember that 50% of cars on the road value in excess of $20,000. However when buying auto insurance you should never pay more than you are worth so if your assets aren't worth writing home about don't by excess insurance.
The limits of any uninsured and/or underinsured motorist coverage should also be considered when buying auto insurance. This kind of is important since if you are injured in an accident and can't work due to your injuries this kind of coverage provides for lost income which may be critical.
What about your driving habits? These factors are more important than most drivers realize when buying auto insurance. If you have a flawless driving record then the minimum may be adequate. However if you know you are a poor driver consider collision and comprehensive coverage. If your car is old but you are a safe driver and your car is likely to be stolen consider comprehensive insurance only.
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