Determining what proportion of Auto Insurance Coverage.
The Three Basic Parts To An Auto policy
1. Other Party
Auto Insurance Bodily Injury (BI) Liability and Property Damage (PD) coverage is Legally required in most states today. (BI & PD) most people understand that they need BI & PD, but they need no idea how to determine how much coverage they need.
Try this simple question: What if your car was involved in an auto accident tonight where heaven forbid, somebody else was injured or killed? Remember, everything you own is within the back seat of the car with you and is at risk in a lawsuit! So, what does one think their family would sue you for? $15,000? $25,000? $100,000 or maybe a Million dollars! Where would you get the money to pay them?
Perhaps the Equity in your Home would help? How about your Savings and/or Investments? you’ll even have up to 25% of your wages attached to pay the award in most states! Are you prepared to sacrifice everything you own to pay an award due to this accident? If not, read on for a way to choose the auto insurance coverage you need.
2. You and Your Family
Now let’s turn the above accident around. for a few unfortunate reasons, you or a beloved is the one who is injured or killed in an auto accident. Where would you get the cash if the person who hit you did not have auto insurance coverage or did not have enough auto car insurance? Medical bills can be covered if you have health insurance. But insurance doesn’t cover loss of life, pain & suffering, or permanent disability.
Maybe you’ve got a life insurance policy through your employer or your life policy. is that the benefit amount sufficient to cover your family if your loved one is killed? But even if you have life insurance, what pays for the misery, the pain & suffering, maybe the very fact you or a loved one can’t walk or use their arms again?
You might have a disability insurance policy through your work if you’re lucky or had good financial advice. But social insurance doesn’t pay for loss of life, pain & suffering, or permanent loss of your legs, arm, or hand.
The only coverage(auto insurance coverage) that pays for these things is a part of an auto insurance policy known as Un/Under-insured motorist coverage. you’ll only buy as much coverage here as you have in Liability coverage. Your auto insurance broker should be able to help you determine the exact amount you need.
3. Your Car
Comprehensive and Collision Coverage is the third part of an auto insurance policy and is sometimes referred to as ‘Full coverage.’ The difference is this: If you run into the tree you’re covered by Collision coverage. If the tree runs into you (hypothetically of course), then you’re covered by comprehensive coverage.
Comprehensive also covers broken windshields, fire, theft, and vandalism. the upper deductible (risk) you take here, the lower the premium. Use the savings here to get higher limits in the coverages that protect your assets and your family.
The bottom line to determining proper auto insurance coverage is, of course, the cash available in your household budget. a superb place to start in determining the proper auto insurance coverage for your family is to meet with your local auto insurance agent.
Most cut-rate companies concern themselves with one thing only: Price. Tell them what coverage you’ve got and they’ll see if they can give you the same coverage for less.
You become the insurance professional. If this is often the only need you have then that is ok. If not, you would like to seek the advice of a professional to help you determine the proper amount of coverage you need and how best to accomplish it.
Review the following pointers for auto insurance coverage to make sure you have enough to protect your family.