I am not talking about how much minimum coverage you must buy to be able to drive legally. That is generally easy as companies and brokers are not allowed to sell anything less anyway. However, how much vehicle insurance coverage would make you comfortable? What would be the main factors in your car insurance purchase decisions?
The first thing is that you should buy a lot more liability coverage than state minimum car insurance. There was an article on a newspaper the other day about an accident in which 3 Lamborghini cars collided with each other in Singapore. The total loss is $2.2 Million. The point is that you cannot even make up a story like that. What are the chances of 3 Lamborghinis crashing into each other? Also, hospitals are not cheap anymore. The injuries in an accident can cost substantial amounts. You don’t want your liability coverage to run out. Remember that there are many ambulance chasing lawyers and they will go after you if they believe you have got assets, on no win no pay bases.
Besides, isn’t it enough that you caused them pain and suffering. Why should they have to chase you or be worried about the costs of their medical treatments? I would push my liability limits up to $1 M or the highest I can buy, regardless of having assets to worry about or not. I just would not be able to handle the possibilities of my liability cover being exhausted without making good on people’s damages and losses.
You may think that it would cost you a fortune to do that. Most minimum limits are at around $50,000 and I am talking about multiplying it by 20. What you need to remember is that your premium will not be multiplied by 20 because your cover has been. In most cases, you would only need to pay couple of hundred dollars more if it is even that much. Get a quote for two different levels of auto insurance liability coverage and see.
The next step is to add Uninsured/Under-insured Motorists Coverage. I wouldn’t want to chase people who have no insurance, either. Let’s face it, the national average of uninsured drivers is at 14% and in some states this figure is as high as 26%. There is a high chance one of them will cause damage to you or your car. If this coverage is not automatically included I would look into it.
Most people have reasonably valuable cars. So, you would want to protect your investment. As a general rule, I would buy Collision and Comprehensive Coverage if my car is over $4,000. But this limit is up to the individual. You can buy cheap full coverage auto insurance for a car that is worth $3,500 by setting deductibles at $1,000. This would specially be true if you have a clean driving history. Collision and Comprehensive coverage would pay for most damages to your automobile.
If you have a loan on the vehicle, your lender would tell you what level of coverage is required. It is best to check this and get quotes for possible coverage before signing a loan agreement. Many people may look at the monthly loan payments and forget about additional insurance costs.
I personally, would not be worried much if I have Rental Reimbursement Coverage or not. But, if you are so dependent on your automobile, perhaps it is something you should consider. There are great package vehicle insurance policies that come with tons of coverage and they are reasonably priced.
What I would do is to decide a comfortable level of coverage and get several quotes for it. If the quotes are coming above your budget you may look into dropping some of the coverage and see how much you could save. Sometimes, savings achieved as a result of dropping coverage may not be as much as you would expect. It is easy and quick to get a few quotes and buy your policy online. Find out how long does it take to get car insurance?