Just about every state in the US requires that you obtain some type of auto insurance coverage when you buy a car. There are minimal amounts of coverage that covers the medical expenses and the property damage you’re liable for when you’re deemed at fault for a car crash. However, it’s not always a good idea to get minimum liability coverage just so you can reduce your premiums.
The auto insurance levels are often expressed in 3 numbers, such as 30/60/25. This means that you’re covered for $30,000 for bodily injury for each person and $60,000 total bodily injury for all persons involved in a car accident for which you’re liable. You’re also covered up to $25,000 for property damage. This is the minimum auto liability coverage for North Carolina.
So how do you get proper coverage? Heed these tips to make sure you’re properly protected:
- Always get liability coverage. You have to obey the law.
- Most of the time, getting just the minimum liability coverage is a mistake. However, this may be enough for you if you don’t have any savings or property to your name. It’s better to get the minimum than to have no insurance at all.
- The basic rule of auto liability insurance is to be covered up to the amount that’s equal to your total worth. That’s because if you only get the minimum amount of coverage, then you’ll be liable for medical expenses and car repairs that exceed the coverage of your insurance. That means the other party involved in the crash can go after your personal property such as your home to cover their medical bills.
- Get 50/100/50 if you have very few assets and your car is older than 10 years old. This can still work if you’re on a tight budget, such as if you’re a college student.
- Get 100/300/100 if you’re a middle-income earner with a typical amount of money in savings. While the coverage is double than 50/100/50, it doesn’t mean really mean that your premium payments double as well. Most of the time, it will only increase by about $100 a year or so.
- Get 250/500/100 if you’re really rich or you’ve saved a lot of money. If you own your own house and you have enough savings in the bank, you may be rich even if you don’t think so. So you need a higher level of coverage so that even if other people have high medical expenses, they’re covered and you won’t have to sell your home and deplete your savings.
- If you already have adequate health insurance, then you don’t really need personal injury protection all that much.
- However, you should get some coverage against uninsured and under-insured drivers. The latest stats show that about 1 in 8 drivers are uninsured. This coverage can then cover medical expenses that your health insurance won’t cover. It’s extra protection that doesn’t really cost much, as it may only add about $40 or so per year to your premiums.
- If you have a nice or brand-new car, you may want to get collision and comprehensive coverage. This means your car repairs will be covered after the amount of the deductible. Get the highest deductible you can afford so that you can lower your premium payments.
Auto insurance coverage can be a bit complicated, so make sure you go over the details with your insurance agent. Car accidents can be nasty, and you don’t want any more nasty surprises regarding what your auto insurance actually covers!