We’re inundated with car insurance ads at every turn, each pledging better rates or more personal service. But aside from knowing what your premium is, do you know what your coverage is and whether you have enough?
Your policy will cover liability, bodily injury liability (BIL), property damage, personal injury protection, uninsured/underinsured motorist coverage, collision and comprehensive.
Many states require a minimum amount of coverage, but you probably want to consider insuring for more. Medical bills can add up to many thousands in a hurry, and you don’t want to be on the hook.
Liability packages often have three numbers, like 100/300/100. This refers to the amount of coverage for bodily injury per person (100k), per accident (300k), and property damage (100k). Individuals with higher net worths may want to boost the first two.
The Wall Street Journal says a good rule of thumb is to get coverage for an amount equal to the total value of your assets (house, car, savings, and investments). Those could be seized to cover repairs or medical expenses otherwise.
Uninsured/underinsured motorist coverage is also vitally important. This pays for damage to your car and passenger injuries caused by an at-fault driver who doesn’t have liability insurance, or a hit-and-run driver. Consumer Reports suggests buying the same limits as on your liability insurance.
Remember also to sign up for the highest deductible you can afford, which will reduce your premiums.
