How much is auto insurance per month?
Should you purchase collision coverage, which car insurance deductible to pick or what automobile insurance company to choose? There are so many questions for what seems like such a simple topic.
First of all, you have to Comply with the Law
No matter what opinion you have about car insurance it is mandatory to comply with state laws regarding minimum levels of auto insurance coverage. Most states only require liability insurance with very low levels of coverage so almost anyone can afford car insurance. The downfall is that by selecting an auto insurance policy which only complies with state minimum requirements you have very little coverage in a car accident and may be exposed to great personal liability even in a minor one. Depending on where you live you may also be required to carry PIP (personal injury protection), medical payments coverage and/or underinsured, uninsured motorist coverage.
What type of car do you have?
Do you own a new car or have a 15 year old junker on its last legs? What kind of car you own plays a very important piece of the puzzle. New car owners want to make sure they have enough insurance to cover a replacement vehicle and/or any car repairs. Older car owners may not see the value in a car when the plan is to abandon it at the first accident anyway. You need to define your needs of coverage as they pertain to insuring your vehicle in order to choose the right type of auto insurance coverage.
For drivers who have a car financed its important to understand how GAP insurance works. There are many cases every year when a driver is involved a total loss accident only to be reimbursed for far less than what he owes on a car loan. This not only leaves you upside down with a debt you need to pay off but no vehicle. GAP insurance can help cover the GAP between your car loan balance and any total loss award from a car insurance company with premiums that are very affordable.
Your Current Financial Situation
Drivers of luxury cars or high net worth individuals may not view auto insurance as important as their 401k or brokerage account however the fact remains any person with a lot of assets is a higher target for injured victims… well, at least their car accident attorneys. If you have a high net worth its important to consider higher policy limits to protect your family fortune from over achieving lawyers.