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5 tips for solid auto insurance coverage

May 04 2017

maximize your bodily injury limits

Most often car insurance pays for damage to vehicles, but the biggest risk to you financially is injuring people and not having enough Bodily Injury to Others coverage. You can’t predict an accident happening nor can you predict how many people could be injured. How far would bodily injury protection of $50,000 per person/$100,000 max per accident go if you seriously injured four or more people requiring extended hospital stays and extended rehabilitation? The cost to increase this coverage to $100,000/$300,000 or even better to $250,000/$500,000 may not be as expensive as you think. Many insurance companies consider people who carry higher limits to be more responsible, and offer very competitive rates if you purchase better coverage. Consider the value of spending a little more to have much better protection in the event of a catastrophe.

underinsured/uninsured motorist coverage

Bodily Injury Caused by an Uninsured Auto and Bodily Injury Caused by an Underinsured Auto help to protect you and your family if you’re hit by an auto that is uninsured, underinsured or a hit-and-run situation. This coverage pays if you are entitled but unable to recover bodily injury costs from the owner or operator of the vehicle causing an accident. These limits on your policy should match the limits that you have purchased for Bodily Injury to Others so that you have equal protection for yourself.

accident forgiveness & disappearing deductible enhancements

Most insurance companies are offering accident forgiveness and disappearing deductible protection options. The details of how these coverage options work and eligibility vary among companies; however, they can help you reduce your costs if you have an at-fault accident. If you’re responsible for a major accident that results in 4 points on your driver’s record, it can cost on average an additional $2,500-$3,000 over six years. When you compare this to the cost of adding Accident Forgiveness and Disappearing Deductible to your policy, you may decide it’s well worth insuring against a significant spike in your insurance costs.

substitute transportation (rental)

It can take weeks to get your car repaired if you have a major accident. Consider how much it would cost if you don’t have access to another car and had to rent a car for 3 or 4 weeks if your car is damaged and unable to be driven. Even if you’re not at-fault, the other insurance company may take several days to approve your rental car. By having substitute transportation on your policy, you can have a rental car available without headaches. 

loan/lease gap coverage 

If the amount you finance when buying a car is very close to its full value, your vehicle value may actually depreciate faster than you are paying off the loan. For example, you buy a 2013 Ford Fusion and finance $30,000. If your car is totaled in an accident within a few months, you may find the value to be only $29,000. Gap insurance will pay the additional $1,000 to cover the difference between the loan amount and the value for which you would otherwise be responsible.  

Note: The above general descriptions are for informational purposes only. For specific details about coverage and eligibility requirements, discuss coverage options with an insurance professional and review written details of your insurance policy.

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