Your auto insurance is a collection of different policies that cover you in different ways. Before you buy car insurance, it’s helpful to know how much car insurance you need.
Here’s how it’s broken down:
- Liability coverage – These policies help cover liability and expenses when you’re at fault in and accident. The money will go to the people you hit, but it won’t cover the people in your car.
- Bodily Injury Liability (BIL) – This policy pays for the medical expenses of people injured in a crash in which you’re at fault. You’ll often see BIL policies described as a “20/50” policy or a “100/300” policy. These numbers describe the maximum dollar amount the policy will pay for a single person’s injuries and the maximum for all the injuries sustained by all the occupants of the other car. For example, a policy will pay maximum of $20,000 for a single person’s injuries, and up to $50,000 total for the injuries of everyone in the car you hit.
- Property Damage Liability – This policy pays for damage done to the other car if you’re at fault in an accident. Property liability is sometimes referred to alongside BIL as a third number, so a 25/50/20 liability package will cover up to $10,000 for damages to the other car.
The following policies cover you and your car in an accident:
- Uninsured/Underinsured Motorist Coverage – This helps cover costs if you are hit by someone without insurance, or minimal coverage.
- Collision – This policy covers repairs to your car after an accident.
- Comprehensive – This policy covers costs if your car is stolen or damaged outside of an accident.
Minimum coverage isn’t necessarily all you should have. If you’re involved in a serious accident, it’s possible that an individual’s medical expenses could exceed $15,000, or a group’s expenses could total more than $30,000. In addition, $5,000 for car repairs isn’t a lot, considering that the average car now costs a little more than $20,000.
You’re on the hook when costs exceed your coverage limits. That’s why many people opt for policies that cover more than required minimums, particularly if they have assets that can be seized to pay for repairs and medical care. A good rule of thumb: Make sure you’re covered for an amount equal to the total value of your assets (Add up the dollar values of your house, your car, savings and investments).
How much insurance do you need for yourself?
Collision and comprehensive coverage is worth having if you would want to repair or replace your car after an accident. These policies have a deductible (the amount you have to pay out-of-pocket before coverage kicks in), and they pay out based on the current value of your car, not what you paid for it.
Choose the highest deductible you can afford, because a higher deductible will significantly lower your premium. You’re seeking coverage for major damages to your car, not for every little thing that can go wrong. It’s better to spend $500 of your own money on minor repairs every so often than pay an extra $50 a month whether you need repairs or not. Save collision insurance for when you have car repairs that cost thousands, not hundreds. Remember, if you submit a claim for every little thing, your premium will increase.
- Check out your state’s minimum insurance requirements. It’s possible that the minimum coverage required might not be that different than what you really need.
- When deciding how much coverage you need, make sure you’re covered for an amount equal to the total value of your assets.
- To keep premiums low, choose collision coverage with a high deductible, and plan to pay routine repair costs with your own money.
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If you own a car in Virginia, you must have car insurance to drive it. That’s a fact, and happens to be the very first reason you need car insurance on this top 10 list. HOWEVER, auto insurance is mostly about protecting you financially if something goes wrong involving your vehicle.
Take a look at the top 10 reasons you need car insurance:
- It’s the law. In almost every state, including Virginia, you must at least have liability car insurance or you’ll face criminal fines. Repeated offenses could lead to the loss of your driver’s license and even a jail sentence. As far as reasons go, jail is a pretty you need car insurance, don’t you think?
- Your car is an important asset. For many people, a car is the second-most-expensive purchase they will make in their lives, next to the purchase of a home. Vehicles are essential not just because they’re expensive, but also because of the service they provide to families. Car insurance is a way to protect that important asset.
- No New Car For You! If you try to purchase a new car that includes a loan, you won’t qualify if you don’t have a full auto insurance policy. Beyond that, you won’t be able to lease a vehicle either. Your lender will always want to be paid. If you have an accident and can’t afford to get your vehicle repaired because you don’t have car insurance, the company that provided you a car loan won’t stop asking for monthly payments. Car insurance is one way to help ensure that you can continue to make your car loan payments.
- Cars get you where you need to go when you need to get there. If you decide to skip auto insurance and then get into an accident and sustain damage you can’t afford to repair, you’ll still need to get to work and make other necessary daily trips. Car insurance helps pay for car repairs so you can get where you need to go when you need to get there. Or, you could take a bus.
- The cost of a major accident. One of the many important roles of car insurance is the money for medical costs of people who are injured in accidents that are your fault. Of course, that includes any injuries you may suffer as well.
- Provide legal protection. There’s absolutely nothing stopping someone from suing you after an accident, even if the accident was THEIR fault. Auto insurance gives you a buffer between legal claims and your wallet. That includes providing an attorney to handle any lawsuit stemming from a lawsuit over an automobile accident.
- Protection from Mother Nature. You may think this would never happen to you, but what will you do if there’s a lightening strike, hurricane, tornado, or earthquake that damages or even totals your vehicle? It only takes a tree limb falling on your car from a simple storm and you may be looking at thousands of dollars in damage.
- Non-accident protection. Car insurance can also be crucial if your vehicle is stolen or vandalized.
- Avoid possible bankruptcy. For many people, the uninsured loss of a vehicle completely turns their lives upside-down. There’s no money for another vehicle, so getting to work on time can be difficult. That can lead to loans or credit card use that could spiral out of control.
- PEACE OF MIND. Because car insurance helps in so many areas, not having insurance can lead to some nerve-racking times just hoping against hope that no other bad news arrives. Able Insurance provides peace of mind with auto insurance, life insurance, home insurance and business policies.
For Auto, Home, or Life Insurance In The State Of Virginia, with offices in
Richmond – 9103 Quioccasin Rd, Richmond, VA 23229 (804) 741-6305 and
Charlottesville – 716 Rio Rd West Charlottesville, VA 22901 (434) 979-0814
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