Getting the Most Value for Your Auto Insurance Dollars

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When you're buying auto insurance, trying to figure out how much coverage to get is a balancing act. You want to be sure you have enough coverage if you're in an accident, but you don't want your auto premiums to break the bank. To get the right coverage, you look for discounts and adjust deductibles to lower your premiums—but there's more to consider. 

What You Need
Each state requires all drivers to carry a certain amount of liability coverage. In addition, if you have a loan on your car, your lender may require you to carry comprehensive and collision coverage.

Once your car is paid for, you might consider dropping coverage like comprehensive, collision, uninsured motorist (UM) underinsured motorist (UIM) and medical payments (Med Pay) to save money. However, you are assuming a lot of risk that way. Not having a car payment is nice, but what if a tree falls on your car or you are hit by someone who doesn't have insurance or doesn't have enough insurance? You will have to pay to have your car fixed yourself or drive it around damaged (if it's drivable).

You might also consider increasing your deductibles to save money. Before you make that decision, consider how much each deductible costs you versus how long it would take to break even if you had a claim. You will likely find in the long run you are better off with a lower deductible. This same consideration applies to UM, UIM and MedPay coverage. 

How Much You Need
Each state has its own requirements when it comes to the minimum amount of liability coverage drivers carry. The rest depends on factors like your financial situation and your personal risk tolerance. If you have more assets to protect (like a house and multiple vehicles) you may want to consider higher liability limits.

To learn more about an umbrella policy or what auto insurance coverage is best for you, give me a call. I’d be happy to help you plan a strategy that works best for you.

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