Auto insurance is important protection for you, your family, and other people on the road. There are a large number of company’s that sell insurance. Rates can vary a lot so you can save by getting quotes from multiple companies. You will often get additional discounts by combining your auto and homeowners or renters coverage with the same company. The agent you choose to do business with should explain your coverage’s and options to your satisfaction.
Coverage laws differ by states but generally there is a minimum coverage required and an option to purchase more. As an insurance agent I know that many people will ask for the minimum amount of coverage. In Texas that is 20/40/15 which means $20,000 per person for liability insurance (if you hurt someone), $40,000 liability maximum per accident, and $15,000 for property damage. THIS IS NOT ENOUGH! If you hurt someone in an accident there is a very good chance the injury will be greater than $20,000. It is not uncommon for an injury to be $100,000 or more. The minimum for property damage is also too low to properly protect you and other motorists. Ask your agent to give you information on the incremental cost for higher levels of protection. The maximum available for liability is typically around $500,000. This is good coverage but still may not be enough, especially if you have a lot of assets. If you want more coverage than the auto policy offers you can buy an umbrella that adds an additional amount. For property damage the maximum offered is typically $100,000. Keep in mind that there are vehicles on the road that are valued at 100K or even more.
In most states there is uninsured motorist coverage available at extra cost. This pays you if an uninsured or under insured mororist injures you or your property. This is good coverage to get if it is affordable for you. You can also purchase medical coverage. If you already have health insurance you may want to decline this to reduce your insurance cost. Other options to discuss with your agent could be towing coverage, rental reimbursement, gap insurance and possibly other coverage’s. A good agent should talk to you about every possible discount available from the company. These could include things like a vehicle alarm system, multiple vehicles in the household, drivers training, affinity group, (teacher, police officer, fireman, etc.), electronic fund payment, etc..
Some other ways to save on your insurance could be to have a very inexpensive car and only buy liability insurance. This can save a lot, especially for a young driver. You can also check with your agent for tips on what cars have lower rates before buying a new vehicle. In general, moderately priced 4 door sedans are on the low side. You can also save by having a larger deductible for your collision coverage. Ask your agent about the cost difference for different deductible amounts.