Customize Your Insurance – Part III

Auto insurance is probably the most well known and most feared type of insurance. Most state’s have low requirements for your insurance such as $30,000 of coverage for bodily injury, $50,000 total coverage for the accident and $20,000 coverage for property damage, including your vehicle. This is, in my opinion, not enough. What happens if you were to injure someone severely and they sued you? There is no way that low budget insurance plan will cover more than 10% of their lawsuit.

If the car you are looking to buy and insure is an expensive car, it is suggested you look into your policy’s “replacement cost” coverage. Most plans will only give you what they believe your car’s value was just before the accident, not what it will actually cost you to replace the car if you were to go out and get the same car again.

Looking at it from the opposite end, if your car is what many considered to be a “beater” or a “jalopy” you can easily save some money by dropping collision coverage. If the car is already in bad shape, will you mind driving around with a dented bumper? I didn’t think so. Save your money and drop the collision if the appearance isn’t so important to you.

As mentioned earlier in Part II, consider a policy which requires a higher deductible be paid in the even of an accident. Go for the $1000 deductible instead of the $500. This will result in a lower premium and save you money.