Auto Insurance Coverage Advice - Tips for Buying Ample Auto Insurance Coverage
The Truth About Auto Insurance Coverage
Q: I am worried I do not have enough coverage and was wondering if you had any auto insurance coverage recommendations. I own my own home and would be the only driver on my policy. Thank you.
A: Without knowing the value of your home, your total assets, and your annual salary this is a tough question to answer. The basic recommendation is to buy what you can afford and go from there. Each state has a minimum amount of coverage that your policy should contain. Anything you purchase above and beyond that is dependent on your financial situation.
If you have significant assets then purchasing a policy that will cover more damages is the only financially sensible thing you can do. You do not want to risk your home, 401k, savings, or other investments in a car accident.
Our auto insurance coverage recommendations are to shop around for the policy that best suits your needs. In order to determine your needs take a good look at your financial situation as well as taking an honest self-assessment of yourself as a driver.
Lastly, consider that cars depreciate in value much more quickly than you pay off a typical car loan. If you owe ten thousand dollars on your car and it is totaled the insurance company will pay for the current value of the car and not what you owe. So if the car is only worth eight thousand at the time of the accident you will face an out of pocket loss of two thousand dollars.
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