Auto Insurance: Setting Your Limits

You spend your whole life testing your limits. You want to know how high you can climb, how fast you can run and how much you can get away with before your mother catches you. When you become an adult setting your limits gets harder. The good news is, it doesn't have to. Setting your limits when it comes to your auto insurance is as easy as A.B.C.

A)Ask yourself whether you think the state minimum level of insurance is enough to protect you if you're involved in an accident or if you're still going to end up holding the bill.

Most states don't require you to carry more than $25,000 in personal property liability coverage, which can quickly be gobbled up the first time you find yourself staring at a cracked streetlight. And $50,000 doesn't go very far in bodily injury protection when you think about the fact that most hospitals charge you between $500-$1,000 just to walk in and say hello. Add in the cost of a physician, radiologist, pathologist, pharmacy and laboratory, not to mention a brief but memorable stay in the ICU.

Most experts recommend you keep $100,000-$500,000 (erring on the side of $500,000, of course) worth of liability auto insurance on your vehicle at all times.

B)Buy comprehensive and collision coverage. This is a mistake that many, many people who own their car make. They think that since there's no lender leaning over their shoulder and telling them they have to pay for additional coverage they're off the hook. Unfortunately, that's not going to help them if their car is totaled because Bambi decides to play chicken on a public highway or they're stuck at the bottom of a ten car pileup they caused.

That's where comprehensive and collision coverage come into the mix. You should have both on your policy, up to and including the cost to replace your car, to ensure that you're never left without a set of wheels because you decided that "good enough" was good enough.

C)Check out your perks. There are some valuable services that auto insurance providers offer along with their policies, and if you don't already have a roadside assistance service like AAA or medical insurance through your employer to cover YOUR medical bills after an accident it might be worth the monthly investment. If you don't need the extra coverage, however, let it go and enjoy the monthly savings. That back-up protection never works out the way you think it's going to, and you undoubtedly have better things to do with your money than spend it on auto insurance perks you're never going to use.

See? Setting your auto insurance limits isn't as hard as you thought it would be. Now take the time to check out your auto insurance policy and see if it's doing everything it should be or if it's time to take a stand when it comes to setting your limits.