If you live or work in Austin, Texas, and are looking for car insurance, you may wonder exactly how much coverage you actually need. You know there is a “state minimum,” but you are concerned that it might not be enough.
Only you can decide how much insurance coverage you will need, and that will depend on a number of factors. These factors include:
- For example, if your car is not yet paid for, the lien holder may require you have full coverage, or if you use your car for business purposes, you employer may require you to have full coverage. If it is paid for, and is an older car, you may be able to get by with just liability.
- Texas state minimum insurance requires that you have $25,000/$50,000 in bodily injury liability and property damage liability of $25,000. Again, unless you are required by your lien holder or employer to have full coverage, this is all the auto insurance coverage you need to be considered legally covered in Austin, TX.
If you want more coverage, you can choose from several options:
- These include coverage for injuries caused by an uninsured motorist (coverage amounts are usually $25,000/$50,000), personal injury protection (usually $2,500), and medical payments ($2,000). Remember, these are optional; they are not required coverage requirements.
The best thing to do is to first determine if you are required by any other entity except the State of Texas to have full-coverage insurance. Then, get several quotes on both full coverage and liability alone. This will help you decide how much insurance you need.
If you’ve been paying attention, you’re probably already aware that if you’ve worked hard and have paid off your mortgage debt, you could stand to see significantly discounted homeowners quotes from various insurers. But losing that discount could be as easy as applying for a home equity line of credit.
The reasons are simple. Getting a line of credit that’s secured against your house is pretty much the same as having a mortgage, especially in the eyes of homeowners insurance providers. Essentially, it’s a lien against your home—something that doesn’t usually drive up insurance costs, but could cause you to lose certain discounts like mortgage-free rates.
So what approach should you take if you’ve paid off your home, take advantage of the mortgage-free discount, but need a loan to pay for a home renovation project? Here are a couple of options.
- Find house insurance elsewhere: This is certainly always an option. But while taking your business to another insurance company might send your previous insurer a message, you’re not likely to have any better luck with another company. Insurers typically structure their discounts in the same way, and the bottom line is that by using your house as collateral for a loan, you’re setting yourself up to pay higher insurance rates.
- Apply for an unsecured loan: By applying for an unsecured loan to pay for your renovation project, you won’t be placing a lien against your home, and therefore won’t lose your mortgage-free insurance discount. But whether or not you’re saving money depends on the insurance rate that you’re able to secure on the loan versus the amount of the discount you’re getting on your home insurance.
There are a good number of variables that go into how much money you pay for your home insurance. In order to be certain that you’re never paying too much for it, shop around regularly and compare homeowners quotes from various insurance providers.