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Finding the right auto insurance coverages

While shopping for auto insurance, you should think carefully about choosing the right coverages. Auto insurance coverage protects not just your vehicle but also your financial assets if you are found responsible for an accident. Choosing the right level of coverage depends on many factors, including your income and total assets, the value of your vehicle, and of course how much money you can afford to spend on insurance.

Choosing Liability Limits

Selecting which liability limits are right for you is very important when comparing auto insurance rates. One thing to remember is that you can never have too much insurance coverage, because it is impossible to predict if and when you may be involved in an accident and how much the total damage may be.

The higher your liability limits are, the more likely your auto insurance policy will be able to pay for the full amount of damage if you’re at fault for an accident. You should ask yourself: how would I be able to pay to repair damage to someone else’s vehicle or pay for someone’s medical bills if I do not have enough liability coverage? Also consider this: if you injure someone in an accident, do you own any property or other assets that someone could come after to help pay for damaged vehicles or expensive medical bills?

If you are currently leasing your vehicle, the leasing company will most likely require that you carry higher than the state minimum liability limits. Most leasing companies require you to purchase at least $100,000 per person and $300,000 per accident for bodily injury liability and $50,000 per accident for property damage liability, which is known as 100/300/50.

Determining if Full Coverage Is Necessary

The term “full coverage” is simply another way to describe physical damage coverage, or collision and comprehensive coverage for your vehicle.

When determining whether or not you should get physical damage coverage, you should consider the vehicle’s age, total mileage, and its current resale value. As a general rule, the newer your vehicle is, the more likely you will want to carry physical damage coverage on it. Newer vehicles typically have a higher resale value than older vehicles, and if they are damaged in an auto accident, you would most likely want to repair the vehicle rather than replace it.

If you own a vehicle that is over 10 years old, you may want to consider purchasing a less expensive liability-only policy. An older vehicle with low resale value may cost much more to repair than the vehicle is actually worth today, especially considering that you would have to first pay a deductible to have it repaired.

If you are currently financing your vehicle, you will most likely be required by the lender or finance company to carry both collision and comprehensive coverage. Because a financed vehicle is still technically owned by the lending company, full coverage protects them until you completely pay off your loan. Once paid off, you can feel free to keep collision and comprehensive coverage or select a liability-only policy.

Like financed vehicles, if you are currently leasing your vehicle, you will most likely be required by the leasing company to purchase both collision and comprehensive coverage, and it is common for leasing companies to require that the deductibles be no higher than $500. Again, the reason leased vehicles require full coverage is so that the vehicle is protected while it is still owned by the leasing company.

Understanding Medical Payments Coverage

Serious injury from an auto accident can easily cost tens or even hundreds of thousands of dollars. That’s why choosing coverages that protect you and your family if you are injured in an auto accident is one of the most important things to consider while comparing insurance rates, but often overlooked. Since the costs of health care seem to be constantly rising, selecting higher limits for medical payments coverage is necessary to avoid having to come up with thousands of dollars out-of-pocket for medical bills.

Insuring Antique or High Value Vehicles

If you are a car collector with a passion for owning antique or high value vehicles, you will want to purchase a different insurance policy for these vehicles than standard auto insurance coverage. These specialty auto insurance policies are much different than standard policies because most owners of antique or high value vehicles don’t drive them every day. Instead they limit their use to weekend and pleasure driving or special events such as car shows and parades.

Auto Insurance for Antique or Classic Cars

Classic car owners typically drive their vehicles only during special occasions or events such as car shows, exhibitions, and parades, which keeps the total number of miles driven by these vehicles much less than a car used for a daily commute. Since the use of these vehicles is limited, the chances that they will be damaged in an accident is also greatly reduced.

Because antique or classic cars are driven much less and also less likely to be involved in an accident, classic car insurance policies typically provide basic liability coverage at affordable rates. However, because replacement parts for antique vehicles are rare and often hard to find, many insurance companies require that they be kept in a locked garage when not in use to reduce the chance that they will be damaged.

Before purchasing insurance for your classic or antique vehicle, it is very important for you to determine how much your vehicle is worth. Because the value of these vehicles actually increases over time, insurance companies use the “agreed value” method to determine how much they are worth at the time you purchase your policy. This amount or value is agreed upon by both you the owner of the vehicle and the insurance company, and makes sure that you will receive the proper amount in the event of an accident.

Auto Insurance for High Value Vehicles

Usually, for a vehicle to be considered “high value”, it needs to be worth more than $100,000 or be extremely rare or unique. Like classic and antique cars, high value and exotic vehicles are typically driven on a limited basis and not used for daily commuting. This limited use allows insurers to offer special insurance policies that include higher coverages tailored to the vehicle’s value, often at a minimal cost to the car owner.

Insurance policies for high value vehicles are different than standard auto insurance policies because they may set a limit on the total number of annual miles driven by these vehicles. Also, because these vehicles are worth much more than average cars and cost much more to repair or replace, high value vehicle insurance policies may include deductibles that are much higher than the standard $500 deductibles for collision and comprehensive.