Car insurance is not only necessary but also a burdensome expense. What amount of insurance should you purchase? What is the right amount? It can cause real headaches.
Protecting yourself is best. Be a bit more cautious and allow for some flexibility in the limits of your automobile policy. Any good agent will tell you to buy as much automobile insurance as you can afford. Although this guideline is helpful, it won’t help you. This advice is not as helpful as a stockbroker’s tip to sell low and buy high. While it may be basic advice, it will not help you make informed decisions. Keep reading and I will try to simplify the process of purchasing the right car insurance.
When you are involved in an accident that involves property or people, liability coverage is what comes into play.
This coverage is required in many states. This is very smart. The problem is that the limits required are often extremely low. In the case of a major accident, this leaves the possibility that the other driver will pursue the driver for any damages beyond the policy limits.
What does this mean exactly?
Let me show you: If your state has a minimum liability requirement of $40,000, then that is all insurance will cover for in an accident. This may seem like a large sum, but it can make a huge difference in the final costs if someone is seriously injured or has extensive property damage. The $40,000 won’t go far enough and it’s not even close to enough.
You can get an idea of the problems that this can cause by looking at the average cost of a one-night hospital stay. It is expensive. This could mean that the victim of the crash or the property owner may come after you to recover the difference. This is possible and can happen.
By increasing your limit on bodily injuries coverage and liability insurance, you can prepare yourself for such a situation. Instead of paying $40,000 for the basic limit, opt to pay $100,000 per person and $300,000.00 per accident. Surprisingly, the cost difference for insurance policies is not that significant. However, the benefits in the event of an injury can be substantial.
Consider this: A policy with a higher limit can give you leverage after an accident. The other party will most likely agree to the policy limit. This is good news for both you and your case. If your policy is not comprehensive enough, they may not be as keen to settle. You will most likely find that they will choose to sue you, which you don’t want.
I hope you have found some things to consider. Although too much insurance can be a waste, having the right amount of coverage can make a difference in how your life turns out. By ensuring that you have sufficient coverage, you can help protect yourself and your assets from a crash.
Although you may pay a few dollars more per month for a higher-limit policy, you might not use it. However, it can make all the difference if there is a crash. It is money well spent.
