How to Determine How Much Auto Insurance Coverage You Really Need

You are required to purchase the minimum amount of liability automotive coverage in most states. But chances are you will actually need much more coverage than the minimum amount can provide if you wind up in an accident. What if there are legal fees involved? Most accidents can wind up costing much more. If you are found responsible in the event of an automobile accident, you will be responsible for paying the difference that your insurance doesn't cover. These costs could be financially devastating. If you are responsible for others like your children or other dependents, having coverage provided to cover you own hospitalization and injuries is important as well.
Take Time to Educate Yourself Many people are intimidated by auto insurance. They assume that it is too complex to understand, so they end up leaving big decisions about their policy's coverage to their agent or insurance company. Your agent and insurance company should offer guidance in your decision, but you need to understand exactly how your insurance works, and how to make sure you have just enough coverage.
You should also take the time to shop with different companies and agents to find the best rate and the best services for your money. You will need to rely on your insurance company and agent if there is ever a problem. You want to have complete confidence in the company handling your claim and trust that any suggestions they offer regarding additional insurance are in your best interest.
The Cost of Being Underinsured According to the Insurance Information Institute, your insurance should have at least $100,000 to cover injury of each person injured in an accident. Medical costs continue rising so it's important that your insurance coverage reflect these increasing costs. When should you purchase additional coverage? One rule of thumb is based on your net worth. Is it more that $300,000? If it is then insurance experts recommend that you have additional liability insurance. There are other options too. An umbrella policy can help protect you from an unexpected accident. So will an excess liability policy. Each of these policies are affordable costing anywhere from $200 to $300 a year for a $1 million in coverage. These policies act as a cover for your basic policy, kicking in money to pay for unexpected accidents or legal judgments when the liability provided in your basic coverage runs out.
Comprehensive Collision Coverage Consider purchasing collision and comprehensive coverage. The cost of your coverage is determined by the market value of your car and how much it costs to have it repaired. Collision insurance will cover damage to your vehicle resulting from an automobile accident, even if you are found at fault. A standard policy pays for repairs up to your car's fare market value. If your car is leased or financed, you may also nee gap insurance to balance to difference of what you owe and what the car is worth.