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Auto Insurance Liability - Limiting Your Exposure

In today's economy, most consumers are looking to save money wherever it is possible. Your car insurance policy is an ideal place to start when you are trying to lower the costs of your necessities. Each state's requirements for insurance vary. It might be beneficial to you to consider carrying only the minimum amount of car insurance required by your state. You can find your state's requirements out by contacting your local Department of Motor Vehicles. Education about the subject of insurance will aid you in making the proper decisions concerning your budget, and limiting your auto insurance liability can save you a lot of money.

An Explanation of Liability & Collision Insurance

The first step you can take is to find out what forms of coverage you are required to carry by your state of residence. By learning what the minimum auto insurance liability you are required to carry is, you can find out how low your rates will go. Liability insurance and collision insurance are the two most common forms of insurance required by a state. Liability insurance is the bare minimum required by any state as it holds the least amount of coverage amongst insurance policies. Currently, forty-seven states require you to carry some form of this type of coverage. With liability insurance, the coverage will provide for the costs of any damages to another driver's vehicle if you are in an accident. It will also cover the costs of the other driver's medical expenses. However, liability insurance will not cover any expenses you may incur regarding your vehicle or medical expenses.

There are two parts to liability insurance: bodily injury liability and property damage liability. Bodily insurance liability is the branch of coverage that provides for the other driver's medical expenses. These expenses can include medical bills, loss of income due to injury, or claims for pain and suffering. Because this portion of your auto insurance liability covers a person and not a vehicle, it is advisable to maintain the same level of coverage for all vehicles and drivers on your policy. Property damage liability is the portion that covers the expenses associated with repairing another driver's property in an accident. However, property damage claims can include repairs to a fence or mailbox or other items your car may damage besides a vehicle. You must keep these possible circumstances in mind when choosing any additional monetary amounts of coverage for your policy.

Collision insurance is required by a state if you own a vehicle with an outstanding balance on it. In the event of an accident, collision insurance will cover the expenses for repairs to your car if you are considered to be at fault. It is important to know that the amount of money your car insurance provider will put forth towards repairs will not exceed the current value of your car. Because of the monetary limitations put forth by collision insurance, it may not be wise to carry this form of coverage on an older vehicle you own outright. Removing unnecessary collision coverage from an older vehicle will be instrumental in lowering your rates to a more affordable level. In another effort to lower your rates, it is recommended to choose a high deductible for your collision policy. The higher your deductible is, the lower your monthly rates will be accordingly. However, it is important to ensure that you have your deductible readily available should you need to use it.

Additional Required Coverage Policies

Often times, in addition to liability insurance, there will be supplemental forms of auto insurance liability you are required to carry by a state. For example, fifteen states in the country currently require you to carry personal injury protection insurance (or PIP). Personal injury protection coverage provides the money to pay for any medical expenses you or your passengers may incur if you are involved in an accident. The monetary amounts required for minimum coverage vary by state, but the general average requirement is around $5,000.00. You must carry the monetary amount dictated by your state, but it might not be necessary for you to purchase an additional amount for your policy. While it might seem prudent to do so, most people are covered by health insurance policies that would contribute towards any additional expenses.

Uninsured or underinsured motorist coverage is another form of supplemental insurance you may be required to carry by your state. If you are hit in accident and have uninsured auto insurance, your medical expenses will be covered if the at fault party has no insurance coverage. This policy will cover you and your passengers. However, the policy will only pay up to the limit of coverage you purchase. Underinsured motorist coverage acts in a similar manner in that if the at fault driver does not have adequate coverage, it will act as a supplement to cover the deficiency. It can be recommended that you purchase only the minimum amounts required with both of these types of coverage. As with the personal injury protection coverage, if you have health insurance, it will cover any further cost of medical care beyond what your vehicle insurance policy will pay.

If you lease a car, you may be required by your state to purchase a GAP insurance policy. However, in most states, this coverage is optional. If your car is damaged in an accident, GAP insurance will cover the actual cash value of the car at the time minus your deductible. It will also provide for any greater amount owed on the vehicle at the time of loss, aside from any unpaid finance charges, excessive mileage, or any other charges or expenses associated with the loan or lease.

There are many forms of vehicle insurance available to you as a motorist. However, beyond your state's required minimums, additional coverage may not be necessary for your needs. You should comb over your assets according to your vehicles' values to determine how much auto insurance liability you should carry. This will enable you to make sure all of your bases are covered in terms of your coverage needs. For example, if you own a brand new vehicle, comprehensive insurance may be a necessary option for you. While purchasing this type of coverage is completely at your discretion, comprehensive insurance will pay for the total cost of repairs to your vehicle despite who is found to be at fault in an accident.

Your next step is to go online and utilize the price comparison tools available on our website to receive an insurance quote. It is a free and quick way to receive multiple quotes from multiple vendors on policies you may be interested in. If you find a policy that is of interest to you, contact an insurance agent with that particular company in order to further discuss your options. Often, an insurance agent who is familiar with the ins and outs of his or her company can provide additional information you can use to receive further discounts on your monthly rates. Complying with your state's requirements while working within the confines of your budget should not be unnecessarily expensive. Armed with the information discussed above, you should be able to begin searching for a policy that will meet your auto insurance liability needs at an affordable rate.



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