A vehicle insurance policy will protect you financially from the cost of bodily injury and property damage. You can also get deductibles to reduce the cost of coverage. There are several types of coverage to choose from, so it’s essential to know which ones suit you best. Listed below are some important considerations when choosing coverage.
Limits of liability coverage
When you buy car insurance, you should look at the limits of liability coverage. Liability insurance covers the costs of damage to other people and property. If you are at fault in an accident and injure someone, this coverage pays for their medical bills and property damage. If you hit another car and cause damage, this coverage will also pay for your medical bills. The liability coverage limits for car insurance can vary from state to state and policy to policy.
You may want to increase the liability coverage levels of your policy. Higher liability limits can protect you from paying for damages if you cause an accident. However, it is essential to note that these coverage levels can increase the cost of your policy.
Minimum liability limits
States sets the minimum liability limits for car insurance. In most states, the minimum liability limits are written as a combination of three numbers. The first number is the bodily injury liability limit per person, the second number is the accident liability limit, and the third number is the property damage liability limit. For example, in New York, you must carry at least a $25,000 bodily injury liability limit per person or $50k for two or more people in one accident. The policy may also provide coverage for ten thousand dollars for property damage.
In Colorado, insurers are required to offer UM/UIM coverage, but you can decline to have it. UM/UIM coverage amounts typically begin at $25,000/50,000 and can go as high as your liability coverage limit on your own policy. UM/UIM coverage limits can include economic and non-economic damages.
Cost of Coverage
The cost of car insurance coverage varies depending on the type of coverage you get. Collision and comprehensive coverage should be equivalent to the value of the vehicle. Skipping these types of coverage is not a good idea because the cost of repairs can quickly add up. In addition, if you get into an accident, the cost of damages can skyrocket. Even if the car is only worth $500, the damages will far exceed what you save by skipping these types of coverage.
Suppose you’re looking for ways to lower your insurance costs; consider combining auto and homeowners insurance. Often, you’ll qualify for a discount just for having both policies. You can also look into special discounts for being a good student or a safe driver. Increasing your deductible is another excellent way to lower your premiums. Depending on the provider, you can save anywhere from $50 to $200 per year by raising your deductible to $1,000.
Deductibles
Car insurance deductibles are an essential consideration when buying a policy. It will determine how much you will have to pay in the event of an accident. The lower the deductible, the less you’ll have to pay. If you’re a safe driver and rarely file claims, you may want to opt for a lower deductible. However, if you’re prone to accidents, you may want to consider a higher deductible.
When choosing a deductible, you must be sure you’re comfortable paying it. You don’t want to have an accident and find yourself without the funds to pay your deductible. You should go with a lower deductible if you have little or no emergency funds. On the other hand, if you have a large amount of money in the bank, you can afford to pay a higher deductible.