Sign Up

How to Determine the Right Policy For You

When shopping for auto insurance, you should give very careful consideration in choosing the right coverages. Auto insurance coverage protects both your vehicle and your assets if you are responsible for an auto accident. Choosing the right level of coverage depends on many factors, including your income and total assets, the value of your vehicle, and how much money you can afford to spend on insurance.

Understanding Medical Coverages for You and Your Family

Choosing coverages that protect you and your family from paying medical expenses if you are injured in an auto accident is one of the most important things to consider while shopping for insurance. With the costs of health care constantly rising, selecting higher limits for coverages that would pay for medical bills is necessary to avoid having to come up with thousands of dollars for medical expenses.

To be safe, it is recommended that you choose higher coverage limits for personal injury protection (PIP) coverage, underinsured/uninsured motorist liability coverage, and additional medical payments coverage.

Choosing Liability Limits

Choosing which liability limits are right for you is a very important part of the process when purchasing an insurance policy. One thing to remember is that you can never have too much insurance coverage, as it is impossible to predict how much the total damage may be if you are involved in an accident.

The higher your liability limits are, the more likely your auto insurance policy would be able to pay for all of the damages. You should ask yourself how you would be able to pay for any damages if you do not have enough liability coverage. Do you own any property or other assets that someone could come after if you severely injure someone in an accident?

If you are leasing your vehicle, the leasing company will most likely require that you carry liability limits higher than the state minimum limits. Most lease companies require you to purchase liability limits of at least $100,000 per person and $300,000 per accident for bodily injury and $50,000 per accident for property damage (100/300/50).

Determining if Physical Damage Coverage Is Necessary

When determining whether or not you should purchase physical damage coverage (collision and comprehensive) on your vehicle, you should take into account the vehicle's age, total mileage, and its current resale value. As a general rule, the newer your vehicle is, the more likely you will want to carry physical damage coverage on it. Newer vehicles typically have a higher resale value than older vehicles, and if they are damaged in an auto accident, you would most likely want to repair the vehicle rather than replace it.

If your vehicle is more than 10 years old, you may want to think about purchasing a less expensive liability-only policy. An older vehicle with low resale value may cost much more to repair than the vehicle is actually worth, especially considering that you would have to first pay a deductible to have it repaired.

If you are currently financing your vehicle and still making payments on it, you will most likely be required by the lienholder or lender to carry both collision and comprehensive coverage. Because the vehicle is still owned by the lending company, this will protect it until you completely pay off the loan.

If you are currently leasing your vehicle, you will likely be required by the leasing company to purchase both collision and comprehensive coverage. Both coverages require a deductible, and it is common for leasing companies to require that the deductibles be no higher than $500.

If you're confused about what policy is right for you, call an Advocate and they'll tell you what is typical for your situation.

Get a Quote