Full Coverage Auto Insurance
Everyone will have their own unique solution to what full coverage auto insurance is. The starting point for all drivers should be to meet the minimum requirements outlined in the state where you live. Next it is vital to understand the risk and exposure you need to protect based on the financial status of you and your family. Full coverage auto insurance will help you mitigate the risk you carry on the road.
A Full Coverage Review:
- Liability Coverage (Bodily Injury, Per Person & Accident, Property Damage)
- Vehicle Protection (Collision & Comprehensive)
- Medical – Could include Personal Injury protection (PIP)
- Uninsured & Underinsured
- Gap Insurance – Primarily for new car owners
- Umbrella Insurance – Extended coverage for wealthier car owners.
Liability Car Insurance
In order to drive most states will require a minimum amount of liability insurance. This coverage for many will not be enough and a further evaluation should be done to find the appropriate protection. One of the primary questions we should all ask is if we are in an accident is there sufficient level of coverage in place to protect our hard earned assets? With this it is essential to conduct a summary of the assets we own and determine how much is at risk if a lawsuit was brought against us. This means reviewing the assets we have in equity, stocks, bonds certificate of deposits, bank accounts and any other assets with value. Arriving at a total will provide an indication to how much coverage you should carry with liability. Visit our bodily injury and property damage coverage page to learn more about these type of coverages. Along with liability coverage some drivers may have the need for an umbrella or gap insurance as liability will not always meet our needs. See below for why you may need gap or umbrella coverage.
Vehicle Protection (Collision & Comprehensive)
Collision and Comprehensive coverage are for vehicle protection and typically not required by state insurance offices. Collision will be the higher costing coverage due to this being one of the highest expenses insurers need to pay out for. One of the better approaches to lower premiums is by increasing deductibles on collision coverage. This typically applies to older car owners where the value of your car is low enough where collision coverage from being in an accident provides little value in relation to the cost. Comprehensive will cost less and covers damages outside of being in a collision. For full details visit collision and comprehensive.
Medical & PIP
To make sure you have complete full coverage it is advisable to review medical coverage and Personal Injury Protection (PIP). Medical coverage is typically a smaller cost to add coverage for to your policy.
Uninsured & Underinsured
Since we are on the road with a wide range of car owners there will be many drivers not carrying auto insurance or carrying the minimum coverage that may lead them to be underinsured. Some states are considered a tort state where commonly the at fault driver is responsible for damages. Other states work under a no fault system where each driver is responsible for their own damages. In some states the uninsured rate is close almost 30%, so this is a coverage you should review with the local insurance company in the state you live.
Cheap Full Coverage Car Insurance
How can you find the appropriate coverage at the cheapest price? Like anything else, the extra time you put into looking for savings will provide the best benefit. There are common discounts, such as safety and theft devices that will apply to all drivers. To review more details on the different discounts available visit our go auto and good car insurance pages. Another excellent way to save is based on the risk profile you have. For instance, family drivers can seek family car insurance tips and young adults can locate reductions for first time car insurance. Along with obtaining discounts insurers will also provide options on how you choose to pay your policy. Is it best to pay every month or should you pay in one installment? Car owners looking for the cheapest coverage should look at monthly car insurance while drivers with more saved cash should look at 6 month car insurance savings. A final strategy to arriving at cheap quotes is to hunt around with numerous insurers. Several web sites work with multiple companies and by submitting your details one time you will receive an array of quotes.
Additional Full Coverage Strategies
Gap Insurance – Gap insurance is a good full coverage auto insurance strategy for new car owners financing their cars. The main reason for the need for gap insurance is our cars depreciate fast. Some estimates indicate up to 30% in the first years and over 45% after three years. Once a new car costing $30,000 drops to $21,000 your car values may be lower than the loan you are carrying on your car. Gap insurance, as the name implies, fills in the gap of the extra coverage you need. A good strategy in purchasing gap insurance is shop around with different car insurance companies. The financing company where you buy your new car will offer gap insurance; however, the pricing will likely be higher.
Umbrella Policy – As your wealth grows a typically auto insurance policy is not designed to provide protection over a certain dollar size. Most umbrella policies start in $1 Million dollar increments. If you have reviewed your assets and see your current car insurance company liability coverage doesn’t offer the necessary protection, and Umbrella policy is something you should consider. The coverage on your umbrella policy will also carry over to other areas such as your home insurance coverage. For instance, if your home insurance limits are at $300K and $500K for auto insurance, your umbrella insurance would extend your coverage $1M above the limits. So you would now have coverage of $1.5M for auto and $1.3M for your home.
Strategy Tips – Full Coverage Auto Insurance
Annually Net Worth Review – A good habit to practice is to review your net worth on an annual basis. Maybe it will be easiest to do this during tax season or at the end of the year to sum up how your financial position is doing. There are many areas that can change during the course of the year. Maybe your home or an investment property has appreciated or depreciated significantly during the year. Same thing goes with your portfolio as volatile equity markets can have a material impact on our net worth. It is a good idea to shop for rates each year, so your shopping can be connected to your net worth review to make sure you have the right coverage to protect you.
Life Changing Events – Some of us will eventually come into inheritance money where significant changes could take place with our net worth. If you do see a material shift in your it is a good idea to check in with your liability limits to see if your current coverage is line with your updated net worth.
Your Car is Getting Older – For those who have gotten attached to our cars there will be changes to the value of the asset we are protecting. If you have held onto your car for several years you likely will see a sizable drop in your cars value. It is never a good idea to cut back n liability coverage, however, for those of us carrying low collision and comprehensive deductibles it is worth a look. Bumping up or eliminating deductibles is great way to save money on your premiums. You will be liable to fixing your car and will need to decide if the extra savings is worth the risk.