Getting auto insurance is one of the most fundamental parts of becoming a licensed driver – it is also a legal requirement. What is not a legal requirement, however, is the maximum at which you want your coverage level – the law only requires the minimum. Do you want to have collision coverage so that when you get into an accident your damages will be covered under your premium, or do you just want to have basic coverage that protects the other driver? These questions are crucial when it comes to deciding what type of auto insurance you need. Here is how to choose the right auto insurance coverage level.
First, it is important to understand that the minimum coverage might only protect a small portion of the potential damages that could be incur if you get into a major auto collision. Most states require the minimum amount of coverage, which is around $10,000. However what happens in the instance that you get into a collision and cause damages to more than one car, a person, or someone’s property, like a building or a house? Your measly coverage won’t protect you in the instance that you cause hundreds of thousands of dollars in damages. In the likely event that you don’t have that money, it will be deducted from your own assets.
Furthermore, you might also want to look at the numbers on your insurance plan to see if you have the coverage you need. For instance, if you look at your policy papers you will notice a series of three numbers that looking like this: “10/20/10.” This is your insurers short code for how much your policy coverers in bodily injury coverage, the maximum rewarded per collision and property damage. In the case of the number above, it would be $10,000 in bodily injury, $20,000 in maximum rewarded per accident and $10,000 in property damage. It might be worth it to discuss with your insurer how to adjust these numbers and if they affect your rate.
Next, it is important to understand the difference between required coverage versus optional coverage. Most states require the basic liability coverage, which covers the other driver’s damages and possible medical bills, but what if you want to be reimbursed if there are damages to your car or there has been a theft? Usually you need to purchase a higher level insurance policy. For instance, if you are in Los Angeles you might want collision insurance because the more you drive the higher your chances of getting into a collision. If this is the case, you can get excellent car insurance quotes in California by InsuranceCar.
Lastly, you must also take into consideration how much your is car worth. If you drive an expensive sports car or you have a classic car that is nearly invaluable, you might want to get the most insurance possible. You don’t want to risk getting into a collision or having you car stolen without some reassurance that you will have monetary protection to fix the damages or purchase a new car. At the end of the day, it is always better to be safe than sorry.