July 21, 2011

When To Consider Upgrading Your Auto Insurance Coverage

During the course of a standard auto insurance policy, it may be necessary for a driver to update his or her auto insurance coverage. This is particularly true after major changes in a household, when a new vehicle is purchased or when driving habits change. Most car insurers offer and easy way to update auto insurance online, and if a driver is considering an update, it's well worth the time to consider whether a change is reasonable and when–and why–auto insurance should be upgraded.

The most common reason for a driver to consider upgrading his or her coverage is added risk, usually due to a change of vehicle. Drivers who purchase new, expensive vehicles should always keep those vehicles protected, and an upgrade in coverage is essential if a new vehicle's value is high. Comprehensive and collision coverage are absolutely essential for protecting a vehicle. Both of these coverage types are actually required by lienholders, which are banks, credit unions or other financial institutions that issue auto loans. However, many drivers who buy their vehicles outright fail to add these coverage types to their policies right away. Comprehensive and collision coverage should be set at the value of the vehicle and should be purchased immediately. If comprehensive and collision coverage would set the cost of an auto insurance policy too high, a driver might consider raising his or her deductible to lower the cost. Many car insurance companies also offer discount programs.

Another reason to upgrade an auto insurance policy is a change in a household. New parents will often buy extra personal injury protection as a means of protecting themselves and their children. Personal injury protection pays for non-liability hospital bills and related expenses. It's another important purchase, particularly if one or more family members have no health insurance. Personal injury protection should also be purchased when a driver starts regularly carrying passengers, for instance if a driver joins a carpool. This coverage is also required in some states, but the required amounts of coverage can be quite low. PIP should be set to cover all possible medical expenses after a serious accident, taking the driver's health insurance into account.

Drivers might also decide to upgrade their auto insurance online before taking a long trip. In many instances, a driver will buy more insurance coverage due to an improvement in his or her financial situation, and this is another good reason for an increase. Whatever the reason for an insurance upgrade, it's helpful to look around for car insurance rates to ensure the best possible deal. Adding car insurance coverage can be expensive, but researching and planning for an increase helps to alleviate costs.