What is the right amount of vehicle insurance that you should carry? All agents will tell you to buy as much as your budget will handle. Well, that may be good for the agent and his or her company, however it may not be good for your or your budget. The standard rule of thumb is to buy only what you need since, you may never utilize the coverage in the first place. But how do you know what coverage you need?
There are several factors to consider before buying a policy. First, find out what is required by law in the state where you live? Second, what does minimum coverage actually cover? Next, what other coverage is available and can you afford it. Finally, what are you protecting? Most states mandate that all drivers carry liability insurance when behind the wheel. This is coverage that pays for damage and injury to the other driver. It does not pay for the damage to your car or to your person. No state requires a motorist to cover himself.
Comprehensive covers your truck, van or automobile and sometimes the other vehicles involved, for damage or injury done in a non collision situation. For example, comprehensive insures you against auto theft, damage by flood or fire or collisions with animals. This type of coverage pays for repair of your vehicle less your deductible. In order to keep your premium low you may want to pay as high a deductible as you can afford out of pocket.
Collision takes care of damage to your truck, van, or car, in the event of a collision with another vehicle or object such as a tree or wall. This kind of coverage is expensive, usually double the cost of carrying comprehensive. It is recommended for drivers who drive new cars. However for older autos, consider dropping this coverage if you have it, or don't sign up for it in the first place. Also consider carrying a high deductible under this coverage as well.
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