Many people consider automobile insurance a “necessary evil”, and feel they won’t use it. This is a good thing, as an accident could cause you to become seriously injured and require a long recovery period. People tend to want the lowest possible insurance and the lowest prices. These are common mistakes in auto insurance.
1. Assuming that you only need minimum limits, because “you don’t have anything.” While recent graduates may not have much to protect, they have a lifetime worth of future earnings. Your wages could be garnished if you are facing a lawsuit for damages done to another person. Higher limits may come at a minimal cost. Make sure you weigh the costs of each option.
2. Not matching your “Uninsured/Underinsured Motorist” liability limits with your “Bodily Injury” liability limits. The reason that you have liability insurance is to protect yourself by paying for the damage done to others if you cause an accident that is your fault. What happens if someone is at fault for the accident and they don’t have insurance? Protect yourself with the same protections you offer others.
3. Not all your policies can be held with the same company or agency. Many companies offer substantial discounts for having all your policies with one company. In most cases it is a good idea to try that in order to get every discount possible. Even if that is not possible, it is a good idea to have all your policies with the same agency so that there are no gaps in your coverage. An umbrella policy should be purchased if you have valuables to protect (home, cars, and personal belongings). It will provide you with additional liability coverage beyond what you get on your standard auto policy. One million dollars worth of coverage can be purchased for less than $200 per year and it can provide a lot of peace of mind. To “seamlessly payout”, umbrella policies require that certain limits on your home and auto policies be maintained. A professional agent should manage your insurance program for these reasons and other reasons.
4 Assuming that all insurance companies and contracts are the same, insurance is basically a promise to pay a loss for a premium. Insurance companies have different reputations and financial ratings. Your premium payment does not guarantee that you will be satisfied with your loss. If your vehicle is a luxury vehicle, such as a BMW, then after the loss, aftermarket parts will usually be used. This is a good thing. These parts often have the same warranties or better quality than the original. However, if you are concerned about a windshield with “BMW” on it, make sure you have this coverage.
5. Consider that you don’t require “Medical Payments” coverage, as you have great medical insurance. The majority of contracts cover your family members and anyone else who is in your car. The coverage limit also applies to each person injured. Funeral expenses are usually covered. If a seatbelt was worn, the limit can be “doubled”. There is no deductible, unlike other types of health insurance.
Your personal insurance plan should include auto insurance. There are many factors that go into making sure you have the right coverage. While you don’t have to pay a lot for coverage, it is worth looking for a company that offers great coverage and meets your needs. We hope you don’t have to use it.