January 22, 2010

Knowing How To Set The Limits On Your Auto Insurance Policy

Setting your auto insurance limits is one of the most important parts of purchasing a new auto insurance policy. Your limits determine how much you will ultimately pay for your premiums as well as how much your insurance will benefit you when you make a claim, and it’s one of the parts of your policy that you have a good deal of control over. Whether you have just recently started looking at insurance quotes online or you have had a policy for some time, it is always worth taking a quick look at your auto insurance limits to determine whether you’ve set the amounts at an appropriate level.

Unfortunately, it is not possible to give a simple number that can clear the entire matter up. The appropriate level of coverage for one motorist might be entirely too low or high for another motorist. Of course, states set minimum levels for many types of coverage (and these minimums vary quite a bit from state to state), but those minimums are often set fairly low. The best course of action is to think about what would happen if you were involved in an auto accident tomorrow. You would want a reasonable amount of liability coverage, and also personal coverage for your own property (especially if you travel with business equipment or other valuable property in your vehicle) as well as medical expenses. You would want your deductible set at a reasonable place, too. After all, if you can’t afford the deductible, the amount of coverage you buy won’t really matter- you will run out of money just the same.

Many drivers worry that raising their insurance limits will affect their auto insurance rate. This is true, as higher limits typically demand a raise in premiums. However, the change is often not as drastic as some drivers think. By looking online, you can experiment with different limits and deductibles to see how changes in certain areas of your coverage could affect your auto insurance quote. This is a good exercise, and will help you determine the limits that you could afford. In general, it is best to opt for high limits as opposed to low limits-you do not want to be stuck in a bad situation after an accident. If you are at fault and the case goes to court, you could end up having your wages garnished or your property seized. Consider each area of your coverage realistically and take into account the amount of driving that you do each day and the possibility of a serious accident. By setting your limits responsibly, you will achieve some great peace of mind on the road.