Are You Buying Too Much Car Insurance?

By • Apr 3rd, 2013 • Category: Insurance

You always want to make sure that you have enough auto insurance to handle any misfortune that comes your way. There are several different additions and incidents that you can add to your insurance plan, and it’s important that you know what all of them are. Bear in mind that it’s possible for you to actually have too much insurance and insurance that you don’t really need. While you want to be prepared for everything, you may be throwing away money by being over-prepared.

Hike the Deductible 

One well-known method for paying less for your auto insurance is to increase the deductible on your collision coverage and decrease the coverage you have for liability. Even though this seems as though it makes a lot of sense when dealing with insurance companies, it sometimes isn’t even worth you taking the risk. There are some types of coverage that are mandatory and others that are simply optional. Collision and liability are necessary, but the amount that everyone pays isn’t necessarily the amount that you should pay.

Bodily Injury Liability

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cc licensed ( BY ) flickr photo by gareth1953

Most states require that you have bodily injury liability coverage, which pays a sum of money to the driver of any other automobiles and their passengers if you were to get in an accident. The main thing you’ll want to keep in mind when deciding on how much you should pay for bodily injury liability is that you want to protect yourself against a lawsuit. Even if you’re a careful driver and the accident isn’t your fault you can still be sued. One way to determine how much you should pay is to think about what assets there are in your life that you need to protect. For example, if you make $30,000 a year and your rent is $50,000 a year, then $100,000 should be enough for bodily injury liability.

Property Damage Liability

For property damage liability, most states require that you have at least $5,000. Bear in mind that this won’t be enough if you hit a driver with an expensive luxury car. It’s recommended that you have at least $50,000 for your vehicle, but you might want to get as much as $100,000 in coverage just to be on the safe side. 

Personal Injury Coverage

Personal injury coverage is something that you can more or less do without, especially if you already have separate disability, health and life insurance. Make sure that you check your other policies first before doing away with personal injury coverage all together. Chances are you’ll be adequately covered.

Uninsured and Underinsured Motorist Coverage

When it comes to uninsured and underinsured coverage, you should ask yourself, what protection do I need? Ideally, you should have at least $100,000 worth of coverage since there are so many drivers who either don’t have auto insurance coverage or don’t have enough to take care of them in the event of a serious automobile accident. Even if you have medical insurance that amount could come in handy.

Look for cheap auto insurance online and combine it with the kind of insurance coverage that you truly need and the amount that you truly need it for in order to save the most on car insurance while still getting the very best policy for you and your automobile.

Author Bio: Dorian Travers is a writer and blogger and likes to keep his readers informed on subjects where life meets money.

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