How much car insurance coverage should you get, and which coverage options should you choose?
You should have at least $500,000 of total liability insurance to cover the cost of the other party involved. The total comes from $100,000 of “bodily injury, per person”, $300,000 of “bodily injury, per accident” and $100,000 of “property damage, per accident”. Bodily injury would be covering someone’s lost wages or medical bills. Property damage would be repairing the other person’s car. Each of these amounts are the maximum the insurance company will pay for in each category. Anything above these numbers, you will be responsible for.
You also want comprehensive coverage to protect yourself if someone stole your car, your car caught fire or due to a natural disaster. This type of coverage will replace or repair your car, as long as it’s not due to a collision.
You also want collision coverage whether you cause an accident or not. This type of insurance coverage will cover the cost of your car.
What factors go into choosing the right car insurance company?
Using a credible insurance company, the number of accidents you have been in and your financial situation. I would use a licensed property and casualty insurance broker who can run all the numbers for you and educate you on your options and the different insurance companies.
What are some ways you can save on insurance?
You can save by increasing your deductible. You will pay your deductible when you need to use your insurance. Depending on your monthly payment to pay for your insurance, see what the monthly cost difference is if you were to choose a lower or higher deductible. I wouldn’t have a deductible over $1,000 until you can afford a deductible that is higher, and it makes financial sense.
If you have other insurance needs such as renter’s insurance or homeowners’ insurance, look for companies that provide discounts if you bundle your insurance. This is another way to save on your car insurance.
How do you advise clients on this matter?
I would review the different options with my clients, using a licensed property and casualty insurance broker, who can run all the different insurance company’s numbers and find the best option.
What type of clients do you specialize in?
Mama’s, mompreneurs, and young professionals.
Would you recommend everyone purchase $500k in liability coverage? What if someone is on a budget, for example, or doesn’t have many assets?
Yes, I would recommend everyone purchase this type of coverage even if they are on a budget. You don’t want to be in a position where if you were to get into an accident and are under insured. That could put you into a financial hole you don’t want to climb out of.
For collision and comprehensive – Do you recommend it in all cases? What if someone drives an old beater that they can afford to repair or replace, for example?
I do recommend it. For just a little bit more money monthly, you can still get a little bit of money if you get into an accident.
If someone doesn’t have access to a broker or doesn’t want to use one for whatever reason, are there any alternatives you suggest for determining the types and amount of coverage needed?
I recommend this website to find an independent insurance agent so they can run quotes for you and will educate you on your options: https://www.trustedchoice.com/agent/ or, do some personal research and educate yourself on insurance to make the best choice for you.
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