How long have you had to wait to buy your first set of wheels? Now that you have your ride you can do everything to can to treat it right. That also means, finding the right insurance. But how much insurance do you really need? That’s the question we’re here to answer today.
What kind of coverage do you need?
How much insurance is needed to protect you, the people in your car and you?
1. Liability Coverage
During an incident, if you’re deemed to be the person responsible for the problem you will have to pay through your nose to have the problem fixed. Unless you have liability coverage of course. Liability coverage takes care of payments that you would ideally have to pay for damage to someone else’s property. How much liability coverage is the right amount? Think about every time you’ve ever met with an accident, all the money you had to pay. An amount of more than $500,000 would cover both physical damages as well as property damage.
2. Collision Coverage
If you’re ever in a collision and you’ve damaged your car the repairs can be quite financially painful. Without car insurance, you will have to pay for your damages from your own pocket. If you’re wondering why liability coverage won’t cover the cost of damages (if you’ve purchased that), it’s only for when another driver is at fault. Don’t try to skip on collission coverage because paying through your own pocket to fix your own car can be very damaging.
3. Bodily Injury Liability (BIL)
In case you’re ever in an accident which caused physical harm to another human being the toll it would take on you mentally would be high. Have you thought about how much it would cost you financially? You’d be responsible for paying the medical bills of all the people you injured. You will see policies labelled as 20/50, or 100/300. It stands for the amount of money the insurance company will pay for the injuries. Either $20,000 for a single person or a total of $50,000 if more than one person was involved.
4. Under-Insured and Uninsured Motorist Coverage
While the responsible and adult thing is to buy auto insurance there are still several motorists on the highway that don’t have any form of insurance. Or if they have insurance they don’t have enough to cover the damage they have caused. In case your car has suffered damage from an individual who doesn’t have insurance or does not have enough insurance.
5. Comprehensive Coverage
The point of comprehensive coverage is to cover all aspects other than accidents. Theft, natural disasters, fire, or even if a tree limb decided to drop onto the roof of your car. You’ll be paid to repair or replace your car as long as the car wasn’t damaged in an accident. The best bit about comprehensive coverage is that it’s inexpensive just like the liability coverage. If you have a brand new car, definitely get some, if you have an old piece of junk, think about how much it means to you.
Decide which of these coverage types you need. Not all of them are mandatory as per state law but the more coverage you have the better protected you are. Take some time to do your own research before investing in car insurance.