Am I Having Correct Car Insurance?

What a loaded question. One might as well ask, “Am I raising my child correctly?” The answer to both is, “That depends.” Before you can answer if your car is insured correctly, you need to ask yourself a few questions. Let us briefly look at a few of these questions to help us find a more definitive answer.

First, what kind of car do you have and how old is it? If you are driving a 2011 Ferrari then you’ll probably want different coverage for insurance than if you were driving a 1982 Volkswagen Rabbit. Every state has minimum requirements that every driver must carry to fix the people and property they hit, but there are no requirements to carry insurance to fix your car.

Liability only insurance covers the cost to fix the other people, car(s) and property you hit; it does nothing for your vehicle.

Full coverage insurance adds getting your car fixed. Full coverage is typically required by the bank if you are making payments on your car. A few other coverages to consider adding in lieu of full coverage are uninsured motorist and under-insured motorist.

Uninsured motorist covers your passengers and your medical bills when you are hit by someone with no insurance. Consider that approximately 1 in 4 cars on the road are uninsured.

Under-insured motorist covers your passengers and your medical bills in case the person who hits you does not have enough insurance to pay the whole bill. Neither of these coverages do anything to fix your car, but if you are seriously injured then they can make a world of difference.

Second, if your car was completely destroyed today, would you be able to buy a new car tomorrow with no financial help? Again if you are driving a $300,000 car, can you afford to replace it no problem? If you are driving a $1000 car, can you afford to replace it no problem? You’ll need to answer that question for yourself.

Finally, how much can you afford to pay towards fixing your car without making it a financial hardship? This question applies to those who want full coverage. Insurance companies have deductibles, this is the amount you pay of the bill to fix your car, the insurance company then pays the rest. It can be $100, $250, $500, or $1000. The higher the deductible the lower your premium. So is your car insured correctly? It depends. Only you can find out the answer to this question.

Want help from an agent? It is easier than ever to obtain and compare insurance quotes! Simply go to American Insurance’s Website to obtain quotes from local agents in your area. Check it out today by clicking here.

Sincerely,
Chris

P.S. If you are from Utah, another great company to talk to is Monson Insurance of Murray, Utah.

Filed Under: Car Insurance