When it comes to buying car insurance, picking the best coverage and add-ons for your policy is not always an easy decision. Terms like liability coverage, property damage, collision, comprehensive, and uninsured motorist can be confusing. We’ve all been there.
A good independent agent will guide you through the buying process to ensure that you not only have the best insurance coverage for your car, but solid liability and passenger coverage as well.
We’ve put together a guide on how auto insurance breaks down and what you should be looking for on your auto insurance policy.
Liability Coverage (for Bodily Injury) & Property Damage
Liability Coverage for Bodily Injury covers other people’s medical expenses and related cost. Property Damage covers damage done to another person’s vehicle and property inside their vehicle. Both coverages protect you in the even that the accident is your fault. Liability limits typically look like this: $100,000/$300,000/$100,000.
The minimum coverage for bodily injury varies by state, but here in California, the minimum insurance a driver legally has to purchase is $15,000 per person, $30,000 per accident, and $5,000 for property damage ($15,000/$30,000/$5,000). For full California details, visit the CA DMV Website.
If you’re thinking, “that doesn’t seem like enough coverage at all,” you’re right. In California, $15,000/$30,000/$5,000 would barely scratch the surface for medical costs, lawyer fees, court fines, auto replacement, and everything else associated with a serious incident. If you do not have enough insurance at the time of an accident, you could wind up with your assets exposed, including future income.
That is we always recommend purchasing a policy that more-than-adequately covers your assets and future income. You’ll often be surprised at how little it costs to increase your coverage to a level that will provide peace of mind.
Collision covers the cost of damage to your own car in an accident. The only thing you need to choose with collision is your deductible. Choosing an auto insurance deductible is all based on personal preference and cost comfort. Deductibles generally range from $250 to $1,000. Collision coverage is very important if your car still holds a good amount of value. However, once your car’s value gets down to around $1,000-$2,000, you may consider dropping collision coverage from your policy to save money.
Comprehensive covers the cost of miscellaneous damages to your car not caused by a collision, such as fire, theft, and a broken windshield. As with collision coverage, the deductible is up to you. The higher the deductible, the lower the premium. But keep in mind, comprehensive costs are usually much lower than collision costs and so if you choose a deductible such as $250 or $500, you may end up paying for the damage yourself.
Medical Expenses cover the cost of medical care for you and your passengers in the event of an accident. The limit you choose is the maximum that will be paid for medical claims to each driver/passenger.
Uninsured Motorist / Underinsured Motorist Coverage
Uninsured/Underinsured Motorist coverage is very important in California due to our below-average auto insurance minimums. If you are involved in an accident and the other driver is at fault, but has no or very little insurance coverage, your Uninsured/Underinsured Motorist limits will cover the gap between your costs and what the other driver’s policy will pay. Please feel free to give us a call for an in-depth explanation of this coverage.
Don’t forget to as your agent about coverage such as:
- Roadside Assistance
- New Car Replacement
- Diminishing Deductible
- Rental Car Reimbursement
- Accident Forgiveness
- Loan & Lease Coverage
- Pet Coverage
- And more!
So how much insurance do you really need for yourself?
The three most important sections on your auto policy are the Liability Coverage for Bodily Injury, Property Damage, & Uninsured/Underinsured Motorist. Start with getting a quote at the $100,000/$300,000/$100,000 level as well as the $250,000/$500,000/$250,000 level. This will allow you to weigh your options and give you a good perspective on how affordable great limits are.