The options for car insurance can be overwhelming, and many people look for the cheapest option. But while you want affordable insurance, you also want the best insurance policy to protect yourself and your family in case of an accident. Insurance companies differ greatly in their coverages, exclusions, and premiums charged. There is also a significant difference in the way insurance companies treat their customers once a claim is actually made arising out of an automobile accident. Here are seven key issues to take into consideration in selecting your car insurance policy:
- Liability. This is a required coverage for your car insurance. Most individuals are not adequately covered as their liability limits are too low. You need to have to have sufficient coverage to protect your income and your assets in case you cause an automobile crash.
- Uninsured motorist coverage (UM). There is a high percentage of people on the road driving without any car insurance (estimated to be above 50% in the Detroit area). You need to protect yourself and your family in case you are involved in an accident involving an uninsured motorist. This can be done through acquiring uninsured motorist coverage, which will compensate you or your family members in a situation where an uninsured motorist causes the crash. The premiums for this coverage are relatively low, yet this is an extremely important coverage. Insurance companies do not adequately educate their clients about this coverage. We recommend at least $500,000 to $1 million of this coverage.
- Underinsured motorist coverage (UIM). This is also an important coverage. There is a large number of drivers who have minimal liability coverage. You can protect yourself and your family by purchasing underinsured motorist coverage, which will compensate you above the at fault driver's low liability coverage for your injuries. This coverage is also relatively inexpensive. Again, we recommend at least $500,000 to $1 million of this coverage.
- Collision coverage. There are various types of collision coverage on your vehicle, which include comprehensive, broad, and basic collision coverage. There is also a variety of different deductibles from which you can choose. Which coverage is the best for you depends on your circumstances. For example, if you have a low-value older vehicle, you need to make the decision whether it is worth it for you to purchase any collision coverage at all.
- Personal Injury Protection. Various options of this type of required insurance include full or excess medical coverage and/or wage loss. Whether you have health insurance or disability insurance and the types of the insurance will factor in to the type of PIP coverage that you should purchase.
- Step-Down Coverage. You should avoid any policy that includes a step-down provision, where an insurance company automatically lowers your coverage if you or a family member causes a crash resulting in an injury to another family member.
- Personal Contents in Your Car. Your car insurance will not pay for the damage to your personal contents in an accident, but you can add that coverage through your home owner insurance at a nominal charge.
You should obtain several quotes from different insurance companies and compare their policies and rates. One way to save money is to bundle your insurance policies, as some companies will give you a cheaper rate for multiple lines of coverage (such as car and home insurance with the same company). Other ways to minimize your insurance rates include maintaining a good driving record and maintaining a good credit score.
It is important that you make sure to add your young children with permits or licenses to your policy. This will protect your assets in case they are in an accident. Michael J. Garris has written a full-length article on the subject, Adding a Young Driver to Your Insurance.
If you need more specific information or have questions about insurance coverages, feel free to contact our office at (734) 761-7282 and speak with one of our attorneys.