Many people overlook how important it is to have a quality auto insurance policy in place.
Car insurance is something that is often just thrown together without much thought.
People buy a car, call an insurance company, set up a policy with their state minimums in place, and then proceed to literally drive themselves into potential big trouble.
Usually, state minimums are way too low to help you when an accident happens.
In California, for example, the liability minimums are $15,000 per person/$30,000 per accident.
Come on now, accidents can often include more than one vehicle. Those limits can be met quite quickly. If you're at fault, say goodbye to many of your assets. No assets? Say goodbye to a sizeable portion of your paycheck for the next few years.
I recommend you call your insurance company and ask them what the price of your premium will be if you raise your limits to $30,000/$60,000 or $100,000/$300,000, especially if you own a home. You may be surprised at how little your premium goes up in exchange for much better protection.
Make sure you have "uninsured" coverage.
My wife had a major accident recently when a motorcycle going over 100 mph hit her and made her car do a 360 degree spin. Guess what? He had no insurance. Luckily, we have the proper coverage to handle this situation.
You want medical coverage, also. My wife had another accident - again, not her fault ;-) - where we would have paid out of pocket for her chiropracter if not for the medical benefit on our policy.
Our car rental option was very useful in both accidents, also.
I recommend you call your auto insurance company and get some quotes on bettering your policy. You'll be glad you did when some idiot with no insurance decides to play bumper cars with you.
Finally, God forbid you're the cause of an accident where someone is seriously injured or worse. If you've prepared properly, you can concentrate on the emotional issues of such a tragedy without dealing with the stress of your finances going to ruin at the same time.
Published by Matt Z. on October 27, 2007 09:33 PM
