How much car insurance do I need? It is a simple question with a very complicated answer. Insurance is a financial investment designed to protect your financial future. With it, you can protect everything. Without it, you could lose everything. In this article, we will explore the various types of car insurance and how much of each you might need.
Compensation for Your Lost, Stolen or Damaged Car
Car insurance policies can include coverage for physical damages to your vehicle. This portion of your policy is separated into two separate coverage types – collision and comprehensive. If you own your vehicle and there are no liens against it, this type of coverage is optional. If you finance or lease your vehicle, you may be required to carry collision and comprehensive coverage to satisfy the terms of your loan or lease agreement.
Collision
Collision insurance helps pay for the cost of repairing or replacing your vehicle if it is damaged or destroyed in a car accident. This includes all types of car accidents, from multi-car pile-ups to incidents involving only your vehicle.
Comprehensive
Comprehensive insurance helps pay for damages caused by events other than collision. While it may not cover everything, it definitely covers a lot. From fires and weather-related damage to theft, vandalism, and run-ins with wildlife, comprehensive insurance can help restore your vehicle or provide compensation to replace it.
Here at Couri Insurance, we recommend that all drivers consider adding collision and comprehensive coverage to their policies. Repairing your vehicle after an accident or non-collision event could cost thousands of dollars. Replacing it could cost far more. Could you afford to pay a $5,000 repair bill out of pocket? Would you have to finance another vehicle if yours were stolen or destroyed? Would you have to rely on public or other forms of transportation for your daily commute?
Limits and Deductibles
There are no limits to choose from when purchasing physical damages coverage. Most insurance companies will insure your vehicle for its actual cash value unless you own a collector’s or antique vehicle, which may instead be insured for an agreed value. However, you will have to select a deductible for both your collision and comprehensive coverage.
Deductibles are paid on a per-claim basis. Each time you file a collision or comprehensive claim, you will have to pay your deductible, regardless of the size of the claim. Depending on the insurer, you could choose a deductible as low as $100 or as high as $1,000. A higher deductible typically translates to lower premiums, but we never recommend choosing one higher than you could afford in the event of a claim.
Coverage for Property Damage Liability
If you’ve ever hit another vehicle or run over someone’s mailbox, you know that you are financially responsible for the damages you cause to another person’s property. Property damage liability is a responsibility of driving, and coverage for such damages is required by state law. Unfortunately, the minimum coverage required is not enough to protect you against major damages. If your property damage liability limits are too low, you could be sued personally for excess damages.
Imagine, for example, a driver who loses control of her car, skidding through a fence and into a parked vehicle in a driveway. The parked vehicle is damaged beyond repair, and the fence will need to be replaced. The total damages are more than $70,000, but the driver’s liability limits are far too low to cover the cost.
In this scenario, the victim’s insurance company might initially pay for fence repairs and vehicle replacement, but the driver would ultimately be pursued for compensation. The driver would still be responsible for any damage costs that exceed her property damage liability limits. She might have to dip into her savings accounts, liquidate some assets, or even make payments from future income to satisfy any judgment against her.
Contact one of our team members today for help determining how much coverage might be right for you.
Compensation for Harm You Cause Others
In addition to property damage liability, Waukesha drivers must also consider their legal and financial responsibilities after an accident that injures one or more victims. If you cause a collision, victims can sue you for compensation for medical bills, lost wages, rehabilitative care, emotional distress, and more. If you were intoxicated, texting, or in any way negligent in causing the accident, a jury could also impose punitive damages.
Bodily injury liability is the part of your car insurance policy that pays for injury-related liability. In Wisconsin, drivers are required to carry at least the legally required minimum coverage, but that may not be enough to provide significant protection against a major lawsuit. Without adequate limits, your income and assets at risk. We recommend choosing the high-limit coverage that safeguards your future against financial devastation.
Split Limits vs. Combined Single Limit (CSL)
Bodily injury liability limits may appear on your policy as either a split limit or a combined single limit (CSL). A split limit is two different limits on your coverage – one per individual and one per accident. If you choose a 250/500 split, for example, your insurer would pay up to $250,000 per victim and up to $500,000 in total bodily injury liability for all victims combined per accident.
A combined single limit has only one limit – the total available bodily injury liability coverage per accident. If you have a 300 CSL, for example, your insurer would pay up to $300,000 in damages to be allocated among victims with no cap on individual coverage.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
If you are injured in an accident, you rely on the at-fault driver to compensate you for your losses. Far too often, the at-fault driver either has insufficient coverage or no insurance at all. With uninsured motorist (UI) and underinsured motorist (UIM) protection, you can better protect you and your passengers against the negligence of others. UI helps cover you and your passengers if an uninsured driver injures you, and UIM helps pay for injury-related losses that exceed the limits in an at-fault driver’s policy.
Money to Help with the Little Things
Little things can add up to big things when you have to pay for several expenses all at once. After a car accident, you may have bills coming in for small charges that quickly become a financial burden. At Couri Insurance, we help our customers personalize their insurance to include coverage for ‘extras,’ such as towing, a rental car, and medical payments for co-pays and health insurance deductibles after an accident.
Beyond Car Insurance
When you choose the right limits and coverage for your car insurance policy, you will be covered against most accident-related liability. However, there are scenarios in which your liability could exceed the coverage on your policy, potentially threatening your income and assets. Instead of exposing your family’s financial future to potential risk, reduce your financial vulnerability with an umbrella policy.
Umbrella insurance is supplemental liability insurance that provides secondary coverage to the liability coverage on your car insurance policy. If your liability exceeds the high limits on your primary coverage, umbrella insurance takes over, paying additional damages up to the limits of your policy. Most umbrella insurance can extend your liability by $1 million or more – all at a surprisingly affordable price.
For more information about umbrella insurance and whether it could be right for you, contact the team here at Couri Insurance today.
