Wednesday, January 17, 2018

What are the Best Ways to Maximize Your Insurance Choices?

Auto insurance is more than just a legal requirement. It is your saving grace if you cause an accident. Here are some tips for making the most of it.

Choose the Coverage Amount that Is Right for Your Financial Situation

Every state has a required minimum coverage level. While the minimum level keeps you in legal compliance, it may leave you on the hook if you are at fault in an accident where damages exceed your limits. 

Many states have coverage limits which can easily be exceeded, such as a $5,000 property damage limit and a $20,000 per person bodily injury limit. It’s not hard to imagine one somewhat serious auto accident exceeding these amounts.

In that situation, you can be found personally liable for all damages above what your insurance pays. 

For example, if your insurance paid $5,000 in property damage to another driver and their car was worth $20,000, you could receive a judgement against you for $15,000.

One of the main points of auto insurance is to prevent you from having to pay ruinous sums out of pocket. 

If you have assets, such as a house or cash savings, always protect them by carrying enough insurance to cover the full cost of an accident.

Carry the Coverages You Need

Though you never want to be caught short, it is also important to avoid over insuring property. For example, if you have a paid off vehicle, the law only requires you to have liability insurance. 

Collision and comprehensive insurance are optional. Collision insurance covers your car in and accident and comprehensive covers your car if it is stolen.

It is important to consider how much you would receive in reimbursement after your deductible if your car was totaled or stolen. 

If you would only get $800, it may not be worth the premium costs to carry collision and comprehensive coverage, though if you would get $10,000, it certainly would be worth covering.

Protect Yourself from the Uninsured

For very little additional cost, you can opt for uninsured and underinsured motorist protection. 

This coverage means that if you are hit by someone without insurance and they are at fault, your insurance company steps in to cover your losses. They also pay you for any shortfall if the other driver’s insurance policy limits are inadequate.

Though the other driver is legally responsible, chances are good that if they have no insurance, they have no ability to pay.

Calculate What You Need

LA Insurance of Denver, Colorado recommends calculating your insurance needs based on your existing assets, the value of your vehicle, and your willingness to risk paying out-of-pocket expenses. Each individual has different insurance needs and budgets, so a good financial workup is needed before selecting coverage.

With the right coverages in place, you can drive the roads of Colorado with piece of mind.

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