What Kind of Auto Insurance Do you Have?

Most people discover that they have improper insurance coverage when it is too late. You don’t want to be in a situation where you are involved in an accident with someone who is inappropriately insured and find out there is not enough insurance money to cover your expenses. Auto insurance protects some of the most important people in your life, “you and your passengers”. For most people their automobile is one of their most valuable assets, next to their home. Appropriately, having good insurance coverage should be taken very seriously. Some people drive with substandard insurance or low insurance coverage or even illegally drive with no insurance coverage at all.

It’s critical to keep in mind that not all policies are alike, so it is essential that you understand the details of what you are protecting, and how coverage options apply (or don’t) to you and your family. Most insurance agents recommend that you carry, at the very least, “Full Coverage.” However, you should consider getting “Complete Coverage” as the price difference is not that much greater and it will give you additional services and peace of mind should you be in an accident. Accidents happen and that is what insurance is for. If you are concerned about costs, it is important to understand your deductible as that is what your rate is based upon. The lower your deductible, the higher your monthly insurance premium; the higher your deductible, the lower your rate will be. For example, if you have a $250 deductible, you will pay more for your premium than if you have a $500 dollar deductible. The best advice I was ever given for determining what my deductible should be was to consider what I could afford to pay if I was in an accident. Below is a table of what you get for Full and Complete Automobile Coverage:

Full Coverage

  • Personal injury liability coverage
  • Uninsured/Underinsured coverage
  • Property damage liability coverage
  • Collision
  • Medical payment coverage or Med Pay

Complete Coverage

All of the above plus:

  • Emergency Road Service
  • Car Rental
  • Death Benefits
  • Loss of Earnings

Special Coverage/Umbrella Policies

If you own your home out right, have a lot of equity in your home or have a large net worth, then you should make sure that you carry enough coverage to assure that someone can’t sue you for everything that you worked hard to build.

Medical payment coverage or Med Pay covers all members of your household should they be in the car accident with you; this is especially beneficial if you don’t have health insurance. Most people carry $5000 for their Med Pay, though you should keep in mind that $5000 does not cover most medical situations. You should research the cost of additional medical coverage, as cheaper is not always better when it comes to Auto Insurance, nor is building your own policy. Having excellent auto insurance is just good sense; it can help protect you from expensive, sometimes devastating, costs. Good insurance will give you a secure feeling and help you be prepared for the unexpected.