Car Insurance Coverage: Do You Have Enough?

FACT: After you have an accident is not the time to find out if you have enough car insurance coverage.

Most of us don’t spend a lot of time pondering whether or not we carry enough car insurance coverage. When you originally purchased your current policy, whether online or through an agent, you probably just made the assumption that your previous coverages were enough and rolled them into your current policy. With the popularity of buying car insurance online, the danger of carrying too little car insurance coverage is becoming more of a reality for many consumers.

Buying car insurance without a complete question and answer session with a license agent, or at the very least with a company representative over the phone, is like playing Russian roulette with your financial future.

More assets, more to protect

As you get older, as does your car insurance policy, and with age generally comes more assets and financial responsibility. If you still have the low liability limits that you had when you were younger (and poorer), then it’s time for a thorough review of your situation to determine if you need more adequate car insurance coverage.

Imagine for a second that you are driving home from work, you want to listen to some classic rock so you reach down to find the perfect CD or song on your iPod. In the fraction of a second that you take your eyes off the road, what if the light was red? What if the car in front of you comes to a screeching stop? What if a pedestrian steps into a crosswalk?  These are all situations that we encounter almost daily on our commute. It only takes a split second of inattentiveness to the road to put yourself in a very bad situation.

If you hit the pedestrian in the crosswalk, it would be very difficult to prove you were not liable for the injuries they sustain from being hit by your vehicle. What if the pedestrian has severe brain damage from your carelessness and requires life support and extensive medical bills for the rest of their life? What about punitive damages? The split second of you searching for AC/DC can easily add up to millions of dollars in liabilities.

Now do you think your 100/300 liability limits are adequate? Or even 250/500? And your million dollar umbrella?

This is obviously a hypothetical worse-case scenario, but in reality, it happens daily.  If you have assets, then you have assets to lose. If you have a family, you not only put yourself in financial ruin, but they suffer as well. It’s time to take a reality check and get a complete insurance checkup and address your old coverages that haven’t been increased since you got out of college.

Liability coverage is CHEAP! Don’t skimp!

Liability is a much cheaper coverage than physical damage coverage, and for a few extra bucks a month, you can have higher limits that more adequately protect your assets. I mentioned an umbrella earlier, and if you thought I was referring to the accessory that keeps water off your head, it’s really time to get educated on insurance coverage.

Umbrellas are for more than just rainy days

Umbrella policies provide coverage over and above your underlying car insurance coverage. As long as you maintain the car insurance liability limits as required by your umbrella policy, your umbrella policy will kick in when your car insurance policy runs out. Depending on your personal situation such as the number of vehicles you own and the number and ages of drivers, you could possibly buy an extra million dollars of liability coverage for around $150 a year. That’s $12.50 a month, and only about 42 cents a day.

Take the time to assess your coverage today

After you hit the pedestrian in the crosswalk, would you be willing to pay 42 cents a day for an extra million dollars of liability coverage? I thought so.  It’s time to find out if you have enough car insurance coverage.