How Much Car Insurance Do You Really Require ?
Insurance Tips
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A growing number of people are dropping their auto insurance in other
to try and save some money, according to a recent study by the
Insurance Research Council (IRC).
If the current rate of unemployment continues, the IRC estimates that
the national uninsured rate will climb from 13.8 percent in 2007 to
16.3 percent in 2010. With that many people driving without car
insurance coverage, it's dangerous to be uninsured.
So the question is : How much car insurance do you really need ?
If you're like many people feeling the pinch, your inclination is to
get the bare minimum of insurance coverage required by the law in your
state. That's a good place to start, though those minimums may not
fully protect you -- or your assets -- if you file a claim.
We recommend getting more than the minimum auto insurance coverage
unless you are driving a beater and have no assets to protect.
Every state in the nation, except for New Hampshire and Wisconsin,
requires that you have liability insurance, and that mandatory
coverage varies according to state.
Personal Injury Protection (PIP), or Medical Payments (MedPay) in some
states, pays for your own medical expenses, any lost wages and
whatever other costs may arise when you're injured in an accident. It
usually pays about 80 percent of your losses, and it also pays a death
benefit.
PIP is required in: Arkansas, Delaware, Florida, Hawaii, Kansas,
Kentucky, Maryland, Massachusetts, Michigan, Minnesota, New Jersey,
New York, North Dakota, Oregon, Pennsylvania and Utah.
Some states also require you to purchase a car insurance that will
cover your own medical expenses, pain and suffering losses and, in
some states, car damage in the event that the other motorist is at
fault and is either uninsured or underinsured.
Even though each state has minimum (or no) requirements for bodily
injury liability, it is probably in your best interest to purchase
higher limits on your auto insurance coverage. If someone else is
injured and you're at fault, the minimum liability coverage may not
cover their medical expenses, in which case their attorney will most
likely come after your assets.
It is generally recommended that you purchase 100/300 limits of bodily
injury liability. On the other hand, if your personal assets do not
amount to much, you don't have a whole lot for them to bother about,
so the minimum requirements on car insurance coverage might actually
suit you and will save you some much-needed cash.
Besides various forms of liability insurance, there is collision and
comprehensive auto insurance coverage to consider. Collision covers
damage to the policyholder's car resulting from running into anything,
be it another car, a fire hydrant, or a light post.
Comprehensive auto insurance coverage takes care of your car in the
case of theft, fire, falling objects, explosions, or other unexpected
problems.
Collision and comprehensive cae insurance coverage are required in
most lease contracts, and are essential if you own an expensive car.
If you're driving an old rattletrap, on the other hand, and the sum of
your premium and your deductible are close to or exceed the worth of
your vehicle, you might want to consider doing without this coverage.
Before you purchase any type of auto insurance coverage, be sure to
study your other insurance policies so you don't end up paying for
something you don't need. If you have a decent health insurance plan,
you might get away with purchasing the bare minimum personal injury
protection coverage- or none at all if your state doesn¿t require it.
However, you might end up paying a co-pay and deductible that wouldn't
apply if you have PIP or MedPay.
Uninsured or underinsured auto / motorist insurance coverage might
also be a wise buy, even if you have full medical coverage, as it can
pay for your pain and suffering damages. If you belong to an
organization that offers roadside assistance, you don't need to
purchase that through your insurer. The same thing applies for
mechanical breakdown insurance if you own a newly financed or leased
vehicle which is still covered under warranty.
It's easy to be resentful of the money spent on car insurance. Keep in
mind that auto insurance will most likely come to your rescue at some
point, so it's imperative to purchase a worthwhile policy.
Know what auto insurance coverage you must have and know what
additional coverage fits your lifestyle. Then if trouble strikes,
you'll be ready.
For more insurance news, tips and advice, visit my blog :
Site : Insurance News, Options, Tips & Best Practices
URL : http://insuranceonline-tips.blogspot.com/