“Car insurance is car insurance right?”

“Car insurance is car insurance right? As long as I have minimum coverage on my car I’m good.” This answer may not necessarily be true. While having state minimum coverage makes you legal with your state, you may or may not be putting yourself at risk unnecessarily. There are a lot of things to consider when purchasing auto insurance other than the monthly payment. Most of us do need to be conscious of the bottom line cost, but we may be exposing ourselves to risk by not looking at the bigger picture.

State minimum coverage is just that, minimum coverage. Here in Missouri, the state minimum is: $25,000 for one-person bodily injury, $50,000 per accident total bodily injury, and $10,000 property damage. What this all means is once an accident occurs, the insurance company will cover one injury to an individual in the OTHER vehicle up to $25,000. If multiple individuals have been injured, they will cover each individual up to a $50,000 limit. So if 5 people were injured, and each sustained injuries costing $12,000, the total cost for injuries for this accident would be $60,000. The insurance would cover $50,000 and the rest would be left for the insured to pay out of pocket (this means you!).

Now for the property damage portion of the coverage. In this example, the coverage for property damage for the OTHER driver is $10,000. This is used to repair or replace the other person’s vehicle, fence, or any other property that may have been damaged. Now $10,000 may sound like a lot at first glance, but how much are most cars on the road worth? With most trucks, SUV’s, crossovers, and even cars costing more than $35,000 new, even a vehicle 2 to 3 years or older will be worth well more than the $10,000 the insurance will pay if the vehicle is totaled (not to mention if there is more than one car involved). Remember if the cost to replace or repair is more than what you are covered for, YOU are responsible for the remainder. You will notice the times the word other was capitalized. This is because this type of coverage does not cover your property or anyone that may be injured in your vehicle. You would be responsible for any damage to your property or any medical expenses for you or anyone in your vehicle.

So how do you keep yourself from assuming this extra risk? Do you have to pay tons each month just to make sure you are covered in case something does happen? The answer to that is no. Insurance policies are not meant to be one size fits all. There are numerous options available to customize policies to make them affordable while at the same time mitigating the risk you are exposed to. You can either change the limits for comprehensive coverage which will give more coverage for the other driver and their passengers, or you can elect to get policies with full coverage. These policies WILL cover your vehicle with options like medical coverage for you and your passengers, Uninsured or underinsured motorist coverages (this covers you in the event of someone either not having insurance or doesn’t have enough coverage and can’t pay the rest), and glass coverage to name a few. With all of these coverages, the policy limits can be changed to be cost effective while giving the best coverage possible. You might be surprised at how cost effective some of these coverages can be. In most cases the limits can be increased dramatically for just a few dollars more a month.

The best thing to do is to contact your agent to discuss your situation and let them tailor make a policy that fits your needs as well as your budget. If you would like, contact us and we will be happy to help you make sure you and your family are ready for whatever life throws at you.