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5 tips for solid auto insurance coverage

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.

car insuranceaccident 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 reimbursement)

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It can take weeks to repair your car after a minor accident, and more than a month if there is major damage. If you don’t have access to another car, consider how much it will cost to rent a car for 3 or 4 weeks if your car is out of commission. Even if you’re not at-fault, the other insurance company may take several days to approve your rental car, and then it could take months for you to be reimbursed by that other carrier for what you spend on renting a car. By having substitute transportation aka rental reimbursement coverage on your policy, you can have a rental car available without headaches. As an estimate, renting a compact car for a week can cost $160 or more. If you're car is in the shop for 3 weeks, that's $480. And, if you don't have collision coverage on your vehicle, you'd also need to purchase the rental company's CDW collision insurance, which could be another $25 a day increasing costs to over $1000. The cost for substitute transporation coverage varies among insurance carriers, but on average $30/day up to a max of $900 costs approximately $60 a year. Not a bad investment to avoid a potentially large cash outlay.

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 2018 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: If you have rolled sales tax and extended warranty costs into your loan, these costs are not covered by gap insurance.)

NOTE:  This information is only a general description of the available coverages and is not a statement of contract. All coverages are subject to all policy provisions and applicable endorsements. Some coverage may be subject to individual insureds meeting underwriting qualifications and to availability within a state.   For further information contact a Murphy Insurance Agency Associate.