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How Much Personal Auto Insurance Do I Really Need?

By |2019-01-07T21:15:52+00:00December 11th, 2018|Personal Insurance|0 Comments

How much personal auto insurance do I really need? That’s a question we heard recently from a new client.

And since we love opportunities to share our knowledge, we thought we’d answer it in a blog post. (We’ll cover commercial auto insurance soon too!)

There are several different types of coverage that your personal auto insurance policy might include. The amount you purchase will depend on a few factors, so you should really discuss your personal circumstances with your broker.

But we can give you a general idea of what is available and how much you might want to buy.

Bodily Injury Liability

Each state requires you to carry a minimum amount of coverage for bodily injury. In Nevada, the minimum recently increased to $25,000 per person and $50,000 per accident.

In some states, the minimum is as low as $10,000 per person and $20,000 per accident. However, we strongly recommend against purchasing the bare minimum coverage here.

At the very least, every driver should carry $100,000/$300,000 in bodily injury liability. If you were to injure someone in an accident, that person could sue you for a lot of money.

This coverage protects you, your family, and your assets in that event.

Property Damage Liability

The minimum for property damage liability coverage also increased in Nevada last year. If you live in this state, you must carry at least $20,000 worth of this coverage.

But we recommend that you carry at least $50,000, as many cars on the road would cost this much to replace.

auto insurance property damage

Excess Liability Coverage

Many personal auto insurance policies have a maximum liability payout of $300,000-$500,000 per accident. But if you have valuable assets, you might want to consider an umbrella policy for additional coverage.

If you own a home or any expensive luxury items, you could lose them in a lawsuit. Therefore, the amount of coverage you buy should be commensurate with the value of your assets.

Comprehensive and Collision

Collision is your coverage for your own vehicle if it is damaged in an accident. Comprehensive covers your car in case it is damaged by something other than an accident. (Like theft or a storm.)

The amount you buy depends on the type of vehicle you own. Your main decision here is whether or not you need to buy it, and how big of a deductible you want.

Of course, a high deductible means lower premiums. But you may feel more secure with a low deductible. It’s up to you.

We recommend purchasing both comprehensive and collision coverage if your car is new or valuable. A $500 collision deductible on a $1,000 car just isn’t worth it. But you don’t want to drive around in a $60,000 luxury SUV with no collision coverage.

auto insurance coverage

Other Types of Personal Auto Insurance to Consider:

  • Medical expenses coverage. This covers medical care for you and your passengers in the event of an accident.
  • Uninsured/Underinsured Motorist Coverage. This covers your vehicle when you are hit by a driver with little or no liability insurance.
  • Personal Injury Protection (PIP). This is sometimes referred to as “No fault” coverage. This covers medical expenses for you and your passengers regardless of who was at fault in the accident. This coverage is optional in Nevada, but some states do require it.

There are several types of coverage to consider when it comes to personal auto insurance. Just remember that full coverage in the insurance industry means you have state minimums for liability and comprehensive and collision.

Many people are at risk in an accident of not having enough coverage or the wrong coverage.

We hope this article helps you understand the basics of personal auto insurance coverage. If you have any questions, please get in touch with us today!

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