The primary job of insurance, and the reason you pay for it every month, is to protect your assets in case of an unexpected accident. For most people, their first inclination is to pay as little as possible each month.
But, you may want to rethink that strategy, because in a time of need you may just find that you are underinsured. You may find that can’t replace what you lost or that your insurance doesn’t cover all of your accident-related expenses.
Read on to find out how to know if you are underinsured, and how to make sure you don’t find yourself with lots more to pay after your insurance benefits have run out.
How Do You Know If You Are Under-Insured?
If you are insured at the bare state minimums for auto insurance, you are most certainly underinsured. While you are saving a small amount each month, you will likely be shelling out cash if you are at fault for an accident.
You will be responsible for any damages that exceed your coverage limits. So, when deciding how much coverage to buy think about your own peace of mind. Consider long-term injuries, totaled vehicles, and multiple passengers.
Ultimately, each driver must decide for themselves what their limits will be. However, by investigating the different coverages you can begin to see that increasing your coverage limits does not always raise your premium a large amount.
By shopping around and receiving quotes for different levels of coverage, you will be able to find a coverage level that gives you peace of mind and a monthly payment that fits your budget.
State Minimum Requirements for Auto Insurance
State minimums should be used as a guideline. Commonly, these limits are:
- Bodily Injury: $15,000 per person/$30,000 per accident
- Property Damage: $10,000 per accident
Consider an accident in which the other driver breaks some ribs and injures their back. These days, this type of injury could easily exceed $15,000. And any type of structural damage to a home or building that you may cause during an accident could fast exceed $10,000.
If you can afford a modest increase in your monthly premium, getting increased coverage may help protect you more fully than if you stick with the state minimums.
How Much Auto Insurance Should I Have?
The best approach to determining if you are underinsured is to make a list of your assets and their value. Remember, if you are underinsured and you become liable for damages that exceed your coverage limits, you may have to start selling those assets to pay the costs.
You don’t have to cover all of your assets at a 100% value, but you should understand what you do and do not want to lose should something happen. Then, set your coverage limits to protect yourself.
You can use the InsuranceWins quote form to find out how much you can increase your coverage for little money. Don’t be underinsured. Be smart and protect what you own.