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  • By Emma Andrews
  • Posted October 9, 2019

What to Look for in an Auto Insurance Policy

A typical day driving your car could turn into an outright nightmare without warning. A “minor” dent or chipped paint on the rear fender can come with a $500 repair bill. And then there are far worse scenarios. What if your car crashes into another vehicle and causes serious harm to the cars and the passengers? Without appropriate insurance coverage in place, you may look as financial ruin. Thankfully, auto insurance policies can cover your losses in a bad situation. Do you have the best possible policy with all the necessary coverage options? Look over your current policy and figure out what you might be missing. And review new policy quotes to figure out if making a switch to a new provider makes sense. Anyone not sure about what coverage to add should ponder these following three options:

Basic Coverage

To start, basic coverage refers to the standard coverage options most people carry — liability coverage for personal injury and property damage are standard and mandated in virtually all states. Carrying liability coverage, however, won’t help you if you are sued beyond your policy. Look over your assets and determine your full net worth. Make sure you acquire appropriate coverage. If you are worth $500,000, a $100,000 limit may prove inadequate. Think about purchasing an umbrella policy if necessary. Collision and comprehensive coverage protect your car against damage you or unseen forces cause, respectively. Neither coverage options are mandatory unless a leasing company or lender compels them. Regardless, you don’t want to be stuck for all the costs if a flood ruins the transmission or if a thief steals it. Paying a little extra for both coverage options might be well worth it.

Uninsured Motorist Coverage

Some states require insurance companies to offer uninsured motorist coverage. No matter what the statutes read, coverage protecting you against an uninsured motorist could cover the cost of replacing a totaled car, medical bills, and more. Drivers don’t always think of the troubles emerging after being hit by someone without insurance. Recovering losses against such a reckless driver can be nearly impossible. People who drive without insurance usually have little assets. Suing someone without any money won’t lead to recovering anything. Many lawyers won’t even take such a case. Purchasing uninsured motorist coverage allows you to avoid such a mess and file a claim with your insurance company. Of course, you need this coverage in place before an accident to do so.

Extended Warranties

New cars come with reasonable warranties, but, unfortunately, they eventually run out. Do you want to be on the hook for a new water pump that requires costly labor to replace? With an extended warranty, several parts could gain additional coverage for damage that occurs outside of negligence, wear and tears, and other specified exclusions. Extended warranties are an option for car owners to purchase. Overlooking them and their benefits could lead to costly regrets. Remember, you never know what can go wrong with a car mechanically. Thus, it is important to be prepared for all scenarios.

Avoid the mistake of rushing into purchasing an auto insurance policy. Don’t think solely about acquiring a “cheap” policy, either. Think everything through carefully. This way, you don’t find yourself underinsured and in financial trouble.

If you need help planning for your financial future, let us help!


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