When it comes to your car insurance policy, you have quite a few options. It can be difficult to figure out which car insurance coverage limits are right for you. There are a number of aspects that you need to take into consideration. Here are a few things you’ll need to think about when deciding on the right car insurance coverage limits:
You may be required by your loan or leasing company to add comprehensive and collision to your policy. The only thing you’ll need to decide on is your deductible, since the limits of these coverages are equal to the value of the car. You may also want loan/lease gap coverage. If your car is totaled while your insurance settlement is less than the amount you still owe, you may have to pay down a car you can no longer drive. Gap coverage will help bridge the gap between what you still owe and the value of your car.
If you’re a homeowner with a lot of financial assets, you may want to increase your liability coverage limits above the legal minimums. If you’re in an accident that you caused and your liability limits are too low to cover your expenses, the other party may go after your assets in court. The higher your limits, the more you will be able to protect your assets. If you have a high net worth, you may want to get umbrella insurance in order to protect the assets you’ve attained.
If you set your coverage limit high and your deductible low, you’ll only have to pay a small amount out of pocket after an accident or claim. When setting your coverage limits and deductibles, figure out the amount that you can comfortably afford.
If your health coverage does not pay for accident-related medical expenses, you may want to add medical payments coverage to your policy. Even if your health coverage does cover these kinds of expenses, your medical payments coverage could assist you in paying the health plan’s deductible. Make sure you look into your health insurance plan before figuring out how much medical coverage to add to your policy.
If you’re a cautious driver who rarely gets ticketed, you might want a higher deductible and a lower rate. If you’re not a careful driver, you’ll want to consider higher limits because they provide more protection.
The Car You Drive
If you have a new car, you’ll want vehicle-protecting coverages like collision and comprehensive. Collision coverage helps cover damage to your own car while comprehensive coverage protects against theft and more. Those who drive older cars may benefit less from these types of coverage since repairs after an accident might barely exceed your deductible, so you’d be shouldering most of the cost anyway.
There are many factors to consider when it comes to getting the right coverage limit on your car insurance. If you think long and hard about these aspects, you’ll be able to make the correct choice for you.