Auto insurance is an individual product, which must be specialized to each client to ensure the best fit. Auto insurance is definitely not a one-policy-fits-all kind of product. Insurance is unlike any other purchase you make. It is something you hope you don't have to use, a protection for yourself, your family, your assets and for others. So spending money on something you don't want to use is not what you would call fun. We're tempted to skimp, keep the bare minimum in coverage and hope for the best. But, in reality, there are numerous situations where you want to be sure that you have all the coverage you absolutely need in order to give yourself the best possible protection and to avoid potential headaches and heartaches, should you need it.
Why Increase Limits and Coverage?
If you have a leased automobile, you need to look at carrying enough coverage to completely cover the cost of replacing the vehicle. There are many policies on the market, which specialize in such situations. If an accident were to happen, a regular policy would give you just the book value of the vehicle, which in most cases is not enough to reimburse you for the loss of the car. You would then be stuck with an out-of-pocket expense or another loan to pay the difference, unless you have the additional coverage.
Similarly, some policies can give you replacement cost if your own vehicle is totaled or stolen. These policies make sure that you are able to replace your vehicle with something comparable, rather than with whatever you can get for the book value of your vehicle. It will also enable you to completely pay off whatever remains on a car loan, if your vehicle is highly financed. It is in no one's best interest to have to pay on 2 car loans, especially when you no longer have one of the vehicles. If you have a new car, an antique car or a luxury vehicle, this is an extremely valuable type of insurance to carry.
If your personal assets are higher than the amount of public liability you hold on your auto insurance, you may also want to consider raising this limit. For a relatively small increase in your yearly premiums you can protect your assets. Were you to be deemed at fault in an accident and your liability coverage was not enough to cover damages and medical costs of the other party, they could sue you for whatever you are worth. Higher liability coverage can protect you in such situations.
Do You Need Those Extra Coverages?
You may also want to consider adding extra coverages to your policy such as rental car reimbursement, in case you have a period of time without your vehicle and need to use a rental car. Towing costs can also be covered and this can be useful to have if you are not a part of an auto club that offers such a program. There are also additional medical payments coverage that can be purchased, but be sure to research if these costs would already be covered or not by your auto or health insurance policies.
Make sure you understand the minimum coverage required in your state and if you have no-fault or tort law. This will help you to make the best choices for your auto insurance policy. To get you started on finding the best possible coverage, be sure that you shop around and compare quotes from at least 5 companies. |
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