One place where many people hope to save money is with their car insurance. However, lowering your car insurance coverage in order to save a few dollars may be more expensive than you think. Being underinsured is a major risk factor, as it means that you may have to pay for damages and other costs out of pocket. Also, being underinsured and taken to court can raise your premiums in the future. If you’re underinsured, other drivers may start legal action in order to recover injuries from you if you do not have adequate insurance. You can avoid all of these problems in many cases by having the right insurance.
Of course, finding the correct amount of insurance for your vehicle is somewhat challenging. There are many insurance options, and not all customers understand all the options available to them. Florida state laws dictate that all drivers must carry a minimum amount of insurance. However, this minimum amount may not always fully protect you if you are in an accident causing personal injury.
There are two types of car insurance, the most basic level. Collision insurance covers damages, personal injury, and loss caused by a car accident. Comprehensive coverage covers damage, theft, and other issues not related to an accident. You’ll likely need both types of insurance.
It is a good idea to review your insurance needs at least every six months or so. As your vehicle’s value changes over time, you want to make sure that you’re not paying too much for your vehicle insurance, while you also want to make sure you are not underinsured. For example, if your vehicle is only worth $5,000, you want to make sure that your collision and comprehensive coverage each cover you for $5,000. If you are paying $10,000 in coverage, and your car is totalled, you will only get $5,000 back. You are paying for the extra $5,000 but may not see that coverage if your car is damaged.
If you have considerable assets, you may want to consider taking out additional coverage above and beyond the value of your car. This helps protect your assets in the event that you’re in a car accident that causes personal injuries and results in multiple claimants seeking legal action against you. You have two options to protect yourself from such an event. You can seek a higher policy limit that applies specifically to liability. You can also seek out an umbrella insurance policy that covers you for car accidents as well as other liability claims. This can help protect you in case you are taken to court over a car accident.