Tips How Much Coverage For Auto Insurance
Tuesday, May 12, 2009, 6:30 AM | Leave Comment
Almost every state requires you to buy a minimum amount of liability coverage. Chances are that you will need more liability insurance than the state requires because accidents cost more than the minimum limits.
If you are found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out!
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Liability – Bodily injury
The Insurance Information Institute (I.I.I.) recommends that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your net worth is more than $300,000, consider buying additional liability insurance.
You may also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverage is exhausted. Typically, these policies cost between $200 and $300 per year for a million dollars in coverage.
If you have your homeowners and auto insurance with the same company, check out the cost of coverage with this company first. If you have coverage with different companies, it may be easier to buy it from your auto insurance company.
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Collision and Comprehensive coverage
In addition to liability coverage, consider buying collision and comprehensive coverage. You don’t decide how much to buy. Your coverage reflects the market value of your car and the cost of repairing it. If your car is relatively new, then you should get this coverage. If it is more than 7 years old, then it might be worth saving the money and not get this coverage.
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Deductible
Decide on a deductible – the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.
In a Nutshell
In some states such as New Hampshire – where we lived between October 1985 and March 2006 – auto insurance is not obligatory. But once you get in an accident, then you have no choice but to get coverage for liability.
The state law states that “New Hampshire Motor Vehicle Laws do not require you to carry Auto Insurance, but you must be able to demonstrate that you are able to provide sufficient funds to meet New Hampshire Motor Vehicle Financial Responsibility Requirements in the event of an “at-fault” accident.
If you are unable to meet these requirements your driving privileges in New Hampshire may be suspended.”
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