A tried and true way to reduce your auto insurance premium is rising on your deductible collision coverage and skimp on your liability. Sometimes it may make sense, but often it's not worth the additional risk. In this section, we'll explain several guarantees that you are likely to be offered as you shop for insurance (some are mandatory). Then, we will help you determine how to proceed in each type.
The liability for personal injuries
This coverage, which is required in most states, compensates the driver of another car and its passengers in the event that you are in an accident. It also covers the passengers in your car. The main consideration is the protection of your assets against lawsuits arising from car accidents. "But I am a cautious driver," you say. It does not matter. You can get prosecuted even if the accident was not your fault.
The liability for personal injuries is sold in standard increments, which means two to how you cover a person in an accident with an additional limit per accident. For example, if you buy bodily injury worth $ 100000 / $ 300000, each person that you injured could be compensated $ 100000, but only up to $ 300000 per accident.
How much protection you need is a function of what you have assets to protect. If you make $ 30000 a year and rent your apartment, $ 50000 / $ 100000 should be sufficient. But if you make more than $ 75000 a year, own a house worth $ 150000 and $ 40000 in mutual funds, you should consider at least $ 100000 / $ 300000 coverage. Our net worth calculator can help you estimate how much coverage you should get.
How you'll pay to increase your bodily injury liability coverage depends on several factors including your age, marital status and driving record. It also depends on where you live. For example, in rural Cortland County, New York, 35, married male afford an average of $ 86 each year to strengthen its coverage of $ 25000 / $ 50000 to $ 100000 / $ 300000, according to the New York State Department of Insurance. In the city of New York, however, where the frequency of injuries is much higher, this same man would have to bomb to an average $ 240 more a year.
Another option: If you have assets to buy $ 300000 in bodily injury on your auto policy and $ 300000 on the responsibility of your policy. Then spend another $ 150 to $ 300 for a $ 1 million policy framework, which covers you against all sorts of liability claims. If you want even more coverage, the cost for an additional $ 1 million in coverage is minimal: It is generally $ 75 to increase your coverage of $ 2 million, then $ 50 for each million after that, according to the Insurance Information Institute.
The responsibility for damage to property
This coverage pay for the repair and replacement of the other type of car or property in case of accident. State minimum requirements are as low as $ 5000, but if you total someone Lexus, which will not begin to cover the damage.
You are better with a minimum of $ 50000 for each vehicle you own. And to be really safe, you should have a total of $ 100000 coverage.
Personal Injury Protection
This is undoubtedly a blanket, you can skimp. PIP pays for the coverage of medical and funeral expenses related to an accident for you and your family - regardless of whose fault it was. But if you already have separate health, life and disability, you can probably give up altogether thereof. Check policies in the first place, but chances are these costs are already covered.
Not insured or under --
This coverage supports medical and funeral expenses for you and your family in case you get in an accident or a hit and run driver or a driver who does not have enough auto insurance. These policies usually cover bike and pedestrian accidents, too. Given the prevalence of uninsured drivers nationally, this coverage is essential. On average, it costs less than $ 40 per year for a value of $ 100000 and to do anything your medical insurance does not cover.
Collision and comprehensive
Collision to reimburse the total cost of repairs or replacement of your car after an accident. Full covers you if your car is the victim of a natural disaster, vandalism or theft. With the coverage is, minus the deductible you choose, plus the policy cost you. We recommend that you always choose the highest deductible you can afford ($ 1000 is fine). After all, the purpose of insurance is to protect yourself against large losses, not to do everything to the last dollar. If you have an old car, you can drop coverage altogether.
Collision and comprehensive - which account for 30% to 40% of your total premium - are worth cash collateral. This means that if your car is damaged, the maximum amount that you will recover is the Kelley Blue Book value, which declines so that your car ages. Here is a good rule of thumb: If the cost of your collision and comprehensive is more than 10% of your car Blue Book value, it probably makes sense to abandon these guarantees and put a tidy sum. With most cars, you should limit this approach as the car runs up to five years. Understand, however, that if you eliminate the covers, you'll have to pay the repair bill if you are in an accident is your fault, or if the car is totaled or stolen.
Extras
While insurance companies will try their hardest to sell you any number of extras to join the main, most of them are not worth it. Consider car-rental reimbursement, which pays a paltry $ 15 or so a day, while your car is in the repair shop after a collision. Not only reimbursement is low, the chances that you will need it are remote. The odds are less able than the other guys are at fault, insurance and pay the total cost of this situation. Another supplement is questionable towing coverage. It costs $ 25 or more per year on a policy, the money you'd be better off putting to an auto club that would be more useful exponentially. A supplement that is worth the cover glass full. Auto Glass is expensive and an errant stone can ruin a windshield $ 500 at a glance.
The liability for personal injuries
This coverage, which is required in most states, compensates the driver of another car and its passengers in the event that you are in an accident. It also covers the passengers in your car. The main consideration is the protection of your assets against lawsuits arising from car accidents. "But I am a cautious driver," you say. It does not matter. You can get prosecuted even if the accident was not your fault.
The liability for personal injuries is sold in standard increments, which means two to how you cover a person in an accident with an additional limit per accident. For example, if you buy bodily injury worth $ 100000 / $ 300000, each person that you injured could be compensated $ 100000, but only up to $ 300000 per accident.
How much protection you need is a function of what you have assets to protect. If you make $ 30000 a year and rent your apartment, $ 50000 / $ 100000 should be sufficient. But if you make more than $ 75000 a year, own a house worth $ 150000 and $ 40000 in mutual funds, you should consider at least $ 100000 / $ 300000 coverage. Our net worth calculator can help you estimate how much coverage you should get.
How you'll pay to increase your bodily injury liability coverage depends on several factors including your age, marital status and driving record. It also depends on where you live. For example, in rural Cortland County, New York, 35, married male afford an average of $ 86 each year to strengthen its coverage of $ 25000 / $ 50000 to $ 100000 / $ 300000, according to the New York State Department of Insurance. In the city of New York, however, where the frequency of injuries is much higher, this same man would have to bomb to an average $ 240 more a year.
Another option: If you have assets to buy $ 300000 in bodily injury on your auto policy and $ 300000 on the responsibility of your policy. Then spend another $ 150 to $ 300 for a $ 1 million policy framework, which covers you against all sorts of liability claims. If you want even more coverage, the cost for an additional $ 1 million in coverage is minimal: It is generally $ 75 to increase your coverage of $ 2 million, then $ 50 for each million after that, according to the Insurance Information Institute.
The responsibility for damage to property
This coverage pay for the repair and replacement of the other type of car or property in case of accident. State minimum requirements are as low as $ 5000, but if you total someone Lexus, which will not begin to cover the damage.
You are better with a minimum of $ 50000 for each vehicle you own. And to be really safe, you should have a total of $ 100000 coverage.
Personal Injury Protection
This is undoubtedly a blanket, you can skimp. PIP pays for the coverage of medical and funeral expenses related to an accident for you and your family - regardless of whose fault it was. But if you already have separate health, life and disability, you can probably give up altogether thereof. Check policies in the first place, but chances are these costs are already covered.
Not insured or under --
This coverage supports medical and funeral expenses for you and your family in case you get in an accident or a hit and run driver or a driver who does not have enough auto insurance. These policies usually cover bike and pedestrian accidents, too. Given the prevalence of uninsured drivers nationally, this coverage is essential. On average, it costs less than $ 40 per year for a value of $ 100000 and to do anything your medical insurance does not cover.
Collision and comprehensive
Collision to reimburse the total cost of repairs or replacement of your car after an accident. Full covers you if your car is the victim of a natural disaster, vandalism or theft. With the coverage is, minus the deductible you choose, plus the policy cost you. We recommend that you always choose the highest deductible you can afford ($ 1000 is fine). After all, the purpose of insurance is to protect yourself against large losses, not to do everything to the last dollar. If you have an old car, you can drop coverage altogether.
Collision and comprehensive - which account for 30% to 40% of your total premium - are worth cash collateral. This means that if your car is damaged, the maximum amount that you will recover is the Kelley Blue Book value, which declines so that your car ages. Here is a good rule of thumb: If the cost of your collision and comprehensive is more than 10% of your car Blue Book value, it probably makes sense to abandon these guarantees and put a tidy sum. With most cars, you should limit this approach as the car runs up to five years. Understand, however, that if you eliminate the covers, you'll have to pay the repair bill if you are in an accident is your fault, or if the car is totaled or stolen.
Extras
While insurance companies will try their hardest to sell you any number of extras to join the main, most of them are not worth it. Consider car-rental reimbursement, which pays a paltry $ 15 or so a day, while your car is in the repair shop after a collision. Not only reimbursement is low, the chances that you will need it are remote. The odds are less able than the other guys are at fault, insurance and pay the total cost of this situation. Another supplement is questionable towing coverage. It costs $ 25 or more per year on a policy, the money you'd be better off putting to an auto club that would be more useful exponentially. A supplement that is worth the cover glass full. Auto Glass is expensive and an errant stone can ruin a windshield $ 500 at a glance.
