This is an often asked question. People want to know just how much auto insurance coverage is too much. And this is in fact a very pertinent question to ask.
If you get too much, you are simply wasting your hard earned money on something that might not even come in handy. But if you buy too less, you run the risk of having to pay a lot out of your private coffers in the event of an accident.
How can one decide how much auto insurance coverage to get?
The easiest piece of advice would be to get as much as you can afford. Try to gauge what amount of money you can set aside every year without feeling the pinch. Once you know what this figure is going to be, you can start by setting aside that amount and trying to gauge whether or not this is affecting your lifestyle. If it does not affect you in a drastic way, you can go ahead and start giving it out as insurance premium. This idea is based on the philosophy that no amount of coverage is too much.
There is another line of thought that suggests one to first decide how much auto insurance coverage you need. First you need to find out what the state’s minimum requirements are. Once you do this, you can decide how much you want to buy over the state’s minimum requirements.
If you are a cautious person, you might end up getting a lot of additional frills and benefits. This is good if you can afford it, but if not you are just wasting your money. Insurance companies love people who are pessimistic. They will be overjoyed to suggest more and more insurance coverage in the name of safety. You must not fall for this; hence it is very important that you decide all your requirements before meeting with the agent.
You must also look at it from the view point of safeguarding your assets. In many cases, it is common for the attorneys to try and attack the assets of the party at fault in a situation when the insurance coverage is not sufficient to cover for all the damages or injuries sustained by the victim. If you have a lot of assets, it is important that you protect them with sufficient insurance coverage. For example, if you buy 100000$ of bodily injury liability coverage and you have assets worth 200000$, then you are underinsured. The attorneys can and will go after your asset base.
You must also decide what sort of insurance coverage you are going to need. You will need collision coverage for vehicles that are older or unpredictable such as classic cars. And this applies to even sports cars, since you would expect to drive it at a faster speed. Anybody who claims otherwise is just lying; a sports car would take you in speeds higher than a conventional car without the driver even feeling the speed. This would give the driver a false sense of safety and hence can and will result in over speeding.
But if you have a good driving record and drive a car that is known for its safety features, you need not go for collision coverage. This would just be a waste as there is not much chance of it being totaled. In this case, you can go for a comprehensive coverage which can safe guard it from being stolen.