Choosing Your Policy

Want to Save on Your Auto Insurance Policy?

If you are looking to save on your auto insurance policy, then you might be inclined to ratchet up your deductible and keep your liability coverages at a bare minimum. Though this could save you money, it is usually not worth the risk. In what follows, we’ll discuss these kinds of trade-offs, the typical coverages you’ll be offered, and how much coverage you need to get the best auto insurance policy.

Property Damage Liability

This coverage pays for damage you do to another person’s property or car in an accident. Although state-imposed minimums might dip as low as $5,000, that won’t even repair a fender if you end up totaling someone’s new Porsche. A better coverage is $50,000 for each car you insure. To be on the truly safe side, you might want to go with $100,000.

Bodily Injury Liability

Mandated by most states, bodily injury liability pays for the injuries of the other driver and his/her passengers as well as your own passengers. The overarching purpose of bodily injury liability is to indemnify you against a lawsuit by another party in the accident. A single lawsuit judgment against you could jeopardize your valuable assets, so adequate coverage here is a must. We’ve broken down the ideal coverage according to your financial situation:

• Make $30,000 and rent an apartment – For people in this category, $50,000/$100,000 coverage should do.
• Make over $75,000, own a house worth over $150,000, and have $40,000 in investments/funds – Get at least $100,000/$300,000 coverage. It all depends on your net worth and how much you stand to lose.
• Considerable wealth/substantial assets – Opt for $300,000 in bodily injury liability and another $300,000 in liability on your homeowner’s policy. Then pay the nominal fee required to invest in an umbrella policy of at least $1,000,000 and possibly even more.

Uninsured/Underinsured Motorist

This coverage will pay you and your family for funeral and medical costs in the event you are hit by a driver with inadequate or no insurance coverage. With the prevalence of uninsured and underinsured drivers on the road growing exponentially, this coverage is a wise idea. It will also usually cover accidents with bicyclists and pedestrians. This coverage can help supplement your medical insurance.

Personal Injury Protection

This is one of the few coverages you would be safe to skimp on a little. It will pay your and your family’s medical/funeral costs associated with an accident, regardless of fault. However, if you already carry sufficient life, health, and disability policies, you can probably do away with this coverage altogether.

Comprehensive & Collision

Comprehensive coverage reimburses you for any non-accident-related damages that occur to your car, such as weather damage, theft, vandalism, fire, etc. Collision coverage reimburses you for the cost of repairs to or replacement of your vehicle following an accident. If you drive an older car, you might want to consider dropping collision coverage.

The best way to keep your premiums low is to remain a safe driver. Check out our Safe Driving Tips page to learn how.