How Much Car Insurance Do I Need.

How Much You Need ?Every year thousands of people are involved in a car accident. Some accidents are very costly and others only require small a small amount of money to fix. In some cases the insurance coverage is more than enough to cover all losses, and in other cases it falls short in covering all expenses. So how much coverage is enough for an insurance policy?

There are several things to think about when deciding about the amount of coverage for an auto policy. The first question to ask is “If there was an at-fault accident, what coverages would be enough to cover all the injury and damage that can occur?” In most cases, hospital bills run into the thousands and damages to property can be just as high. The state minimums are set to cover only minor expenses. Most recommendations for liability coverage are around 100/300/100. Some people will often carry the 250/500/100 limits for just a few dollars more. In some states it is actually cheaper to carry the higher coverage limits versus the minimum amounts.

One other thing to consider is “How much physical damage coverage is enough to carry on a personal auto?” The only thing to think about is whether you can handle the deductible amount in the event of a claim. If paying $500 is within your means then you can save a little on the auto premium.

Insurance amounts are designed to protect the policy holder in the event of a claim or loss. If the insurance coverage is not enough to pay all losses then the policy holder can be sued for the rest. Check with an insurance agent for what may be right for you.

What is the Hidden Cost of Liability Insurance?

Liability Coverage to Cover DamageLiability insurance is the coverage of an auto policy that protects a person in the event of an at-fault accident. When a person has hit another person’s car they are liable under the law to fully rectify and pay for all damages to the person’s property and any medical bills that are directly related to the accident. Insurance is a means that allows the at-fault party to pay for their responsibility to the other person.

Liability insurance amounts are usually listed as 100/300/100. This means that the policy will pay up to $100,000 per person for a total of $300,000 per accident and the policy will pay up to $100,000 for all property damage. The hidden cost of liability insurance is not the cost of carrying such coverage’s but rather the cost to you if your insurance is not enough to pay for the damages to the other party.

Suppose for a moment that a policy has limits of 15/30/10 and there is an accident that totals the car and puts the driver in the hospital for a week. The limits of liability will pay $15,000 per person up to a maximum of $30,000 for the accident. If the person’s hospital bill comes out to be $100,000, the at-fault party will have to come up with the difference from what the insurance policy paid and what is left to satisfy the hospital bill. That leaves $70,000 that you will have to pay out of pocket. In most cases the at-fault party will end up being sued and forced to pay the remainder of the balance. This will destroy their financial status for years to come.