How Much Car Insurance Should You Buy

How Much Car Insurance Should You Buy



How Much Car Insurance Should you​ Buy?
How much insurance should you​ buy? Any insurance agent worthy of​ their salt will tell you​ that you​ should buy as​ much as​ you​ can afford .​
While this is​ a​ good rule of​ thumb,​ it's about as​ useful as​ a​ stock broker's tip to​ buy low and sell high .​
It might be sound logic but it​ doesn't get you​ any closer to​ an​ educated decision .​
There are a​ few filters that need consideration in​ order to​ make that educated decision .​
First,​ what is​ the​ state required minimum coverage where you​ live? Second,​ what does the​ minimum cover? Third,​ what other coverage is​ available and can you​ afford it? And fourthly,​ what are you​ protecting?
What do the​ minimums cover?
Now that you​ know what your state requires,​ what are you​ actually covered for once you​ purchase the​ minimum? Using the​ coverage definitions that follow,​ find the​ types of​ coverage required and see what your state says is​ the​ accepted minimum.
Coverage Definitions
Bodily Injury Liability
Covers other people's bodily injuries or​ death for which you​ are responsible .​
It also provides for a​ legal defense if​ another party in​ the​ accident files a​ lawsuit against you​ .​
Claims for bodily injury may be for such things as​ medical bills,​ loss of​ income or​ pain and suffering .​
In the​ event of​ a​ serious accident,​ you​ want enough insurance to​ cover a​ judgment against you​ in​ a​ lawsuit,​ without jeopardizing your personal assets .​
Bodily injury liability covers injury to​ people,​ not your vehicle .​
Therefore,​ it's a​ good idea to​ have the​ same level of​ coverage for all of​ your cars .​
Bodily Injury Liability does NOT cover you​ or​ other people on​ your policy .​
Coverage is​ limited to​ the​ terms and conditions contained in​ the​ policy.
Comprehensive Physical Damage Coverage
Covers your vehicle,​ and sometimes other vehicles you​ may be driving for losses resulting from incidents other than collision .​
For example,​ comprehensive insurance covers damage to​ your car if​ it​ is​ stolen; or​ damaged by flood,​ fire,​ or​ animals .​
Pays to​ fix your vehicle less the​ deductible you​ choose .​
To keep your premiums low,​ select as​ high a​ deductible as​ you​ feel comfortable paying out of​ pocket .​
Coverage is​ limited to​ the​ terms and conditions contained in​ the​ policy.
Collision Coverage
Covers damage to​ your car when your car hits,​ or​ is​ hit by,​ another vehicle,​ or​ other object .​
Pays to​ fix your vehicle less the​ deductible you​ choose .​
To keep your premiums low,​ select as​ large a​ deductible as​ you​ feel comfortable paying out of​ pocket .​
For older cars,​ consider dropping this coverage,​ since coverage is​ normally limited to​ the​ cash value of​ your car .​
Coverage is​ limited to​ the​ terms and conditions contained in​ the​ policy.
Medical Payments
Covers medical expenses to​ you​ and your passengers injured in​ an​ accident .​
There may also be coverage if​ as​ a​ pedestrian a​ vehicle injures you​ .​
Does NOT matter who is​ at​ fault .​
Coverage is​ limited to​ the​ terms and conditions contained in​ the​ policy.
Uninsured Motorist Coverage
Covers bodily injuries to​ you​ and your passengers when the​ other person has no insurance or​ not enough insurance in​ a​ crash that is​ not your fault .​
In some states,​ there is​ also uninsured motorist coverage for damage to​ your vehicle .​
Given the​ large number of​ uninsured motorists,​ this is​ very important coverage to​ have,​ even in​ states with no-fault insurance .​
Coverage is​ limited to​ the​ terms and conditions contained in​ the​ policy
Personal Injury Protection Coverage
Covers within the​ specified limits,​ the​ medical,​ hospital and funeral expenses of​ the​ insured,​ others in​ his vehicles and pedestrians struck by him .​
The basic coverage for the​ insured's own injuries on​ a​ first-party basis,​ without regard to​ fault .​
It is​ only available in​ certain states.
Property Damage Liability
Covers you​ if​ your car damages someone else's property .​
Usually it​ is​ their car,​ but it​ could be a​ fence,​ a​ house or​ any other property damaged in​ an​ accident .​
It also provides you​ with legal defense if​ another party files a​ lawsuit against you​ .​
It is​ a​ good idea to​ purchase enough of​ this insurance to​ cover the​ amount of​ damage your car might do to​ another vehicle or​ object .​
Coverage is​ limited to​ the​ terms and conditions contained in​ the​ policy.
Rental Car Reimbursement
Covers renting a​ car if​ your car isn't drivable or​ while your car is​ being repaired because of​ a​ covered accident.
What else is​ available and can you​ afford it?
Did you​ come across a​ coverage and think,​ I​ need that but it​ isn't required by state law when you​ were reviewing the​ coverage definitions? Chances are you​ did .​
Can your budget afford the​ additional expense of​ these protections? Or maybe more to​ the​ point; can you​ afford NOT to​ have these additional protections? At CarInsurance.com it's easy to​ get multiple quotes all with a​ click of​ your mouse .​
And during the​ quoting process,​ it's simple to​ add or​ remove coverage to​ see how additional coverage will affect your budget.
What are you​ protecting?
What assets need to​ be protected from being plucked away if​ you​ cause injury or​ damage?
A) Your car itself .​
If this is​ a​ significant asset,​ or​ at​ least the​ bank you​ owe money to​ thinks so,​ then you​ will need comprehensive and collision.
B) Your net worth .​
Do you​ have an​ enormous net worth to​ protect .​
If so,​ either get it​ out of​ your name and into a​ trust or​ buy all the​ insurance you​ can .​
If you​ have little or​ nothing to​ protect,​ then you​ can get by with less and still be financially responsible.
However,​ after you​ determine how much protection to​ get,​ always ask how much more it​ is​ for the​ next level higher .​
Very often,​ you​ can get significantly more coverage for very little cost.
Car insurance isn't flashy .​
There is​ no wow factor and the​ opposite gender isn't going to​ be impressed by the​ size of​ your policy .​
But not having enough can be the​ difference between financial stability and financial ruin .​
For what its worth,​ CarInsurance.com finds financial stability incredibly appealing.




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