How much car insurance do you need? With your income and assets on the line, it is a question that demands a thorough answer. In this article, we are exploring the reasons why Wisconsin drivers should be just as concerned about the types of car insurance protection they have as they are their limits. Continue reading to learn reasons why you need a policy that is personalized to fit your needs.
Compensation for Your Lost, Stolen or Damaged Car
How much do you have invested in your vehicle? If you are like most households, you have at least two vehicles in your garage – maybe more. If something were to happen to one of them, it could cost thousands of dollars to repair it. If the vehicle is deemed a complete loss, you might find yourself buying an entirely new vehicle. Fortunately, car insurance can provide coverage for physical damages to your vehicle. To ensure your vehicle is fully covered, you will need to select both collision and comprehensive insurance for your policy.
Collision – Coverage that pays for personal vehicle repairs or compensation of your vehicle’s loss after it is damaged in collision.
Comprehensive – Coverage that pays for personal vehicle repairs or compensation of your vehicle’s loss when events other than collision damages it. Examples include theft, vandalism, fire, hail damage, or hitting a deer.
If you need to file a claim, your insurance company will assess the damage to your vehicle and determine whether it can be repaired or if it is deemed a total loss. If your vehicle is damaged beyond repair, the insurance company will reimburse you based on its actual cash value. That is, unless, something happens to your collector’s car or antique vehicle, which may instead be insured for an agreed value listed in your policy.
Regardless of the type of claim or how big it is, your insurer will likely require that you pay a deductible. You can select your collision and comprehensive deductible when you purchase your policy. Most deductible options range between $100 and $1,000, with higher deductibles translating to lower premiums. However, many drivers prefer a low deductible to minimize out-of-pocket expenses when filing a claim.
Do You Need Collision and Comprehensive Insurance?
State law does not require collision and comprehensive insurance, so you do not need it to satisfy any legal requirements. However, the coverage is required by many lenders to protect their financial interest in vehicles under loan financing or lease agreements. Even if you own your vehicle free and clear, we still may recommend collision and comprehensive coverage as it may be the difference of you having a reliable car to drive or not having one at all.
Coverage for Property Damage Liability
How much property damage liability coverage do I need? A better question might be, “What do I have to protect?” When it comes to liability, you can be held legally and financially responsible for any and all damages you or your teen driver causes. If you do not have high enough property damage liability limits to cover the loss, you will be personally responsible the balance of the loss.
A small fender bender might be covered under most policies. More extensive damage, however, such as hitting a brand new Cadillac or running into the front of a business store front, could cost tens of thousands of dollars in property repairs and replacement. In many cases, the victim’s insurance company will pay for the initial loss and then pursue you – the responsible party – for reimbursement of those damages.
That is why we here at Glass Insurance Center emphasize the importance of having adequate property damage liability limits. The State of Wisconsin requires that all drivers carry a minimum amount of coverage ($10,000), but it is rarely enough to protect you against a serious at-fault incident fully.
Compensation for Harm You Cause Others
Bodily injury liability is the part of your insurance policy that compensates victims for their injury-related expenses when you are at-fault for an accident. Whether you are partially or totally at fault, a victim can pursue you for loss of wages, medical bill reimbursement, and emotional damages. A jury could also impose punitive damages if you were intoxicated at the time of the accident, texting behind the wheel, or exhibiting negligence at the time of the accident.
Wisconsin requires all drivers to maintain at least the minimum bodily injury liability coverage, but these limits are too low to cover large claims. You are responsible for paying any damages more than your coverage limits. That is why having high-limit coverage is essential for protecting your income and assets against a possible lawsuit.
Split Limits vs. Combined Single Limit (CSL)
Your insurer may offer bodily injury liability coverage as either a combined single limit (CSL) or a split limit. Combined single limits appear as a single number on your policy, which indicates the maximum coverage for all victims in an accident. A 300 CSL, for example, will pay up to $300,000 in total damages, whether there is one victim or several.
A split limit appears as two separate numbers on your policy. The first number is the limit the insurer places on each victim, and the second number is the total amount of coverage available per accident. An example of a split limit would be 250/500, in which there would be up to $250,000 bodily injury liability per individual and $500,000 per accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
If an uninsured driver injures you, it could take years to recover even part of your expenses – if you recover any at all. Don’t put you and your passenger’s well-being in the hands of negligent drivers. Uninsured motorist protection (UI) allows you to take matters into your own hands with coverage for your injuries if you are the victim of an uninsured driver or a hit-and-run. We also recommend underinsured motorist protection (UIM), which fills in gaps left by at-fault drivers with too little coverage.
Money to Help with the Little Things
Towing and rental car fees aren’t going to break the bank, but they can be an annoying extra expense to shoulder after a collision. At Glass Insurance Center, we offer coverage enhancements that help with all of the ‘loose ends’ surrounding an accident. With towing coverage, rental car reimbursement, and medical payments for you and your passengers, you can relax knowing everything is already handled.
Beyond Car Insurance
As a financial services center, our goal is to provide complete insurance solutions that protect our clients’ income, assets, and long-term wealth. For that reason, liability insurance is one of the most important aspects of a car insurance policy, but even high-limit coverage can fall short of meeting your financial obligations after an at-fault accident. That is why we recommend umbrella insurance to provide supplementation for major claims that exceed the limits on your coverage.
Umbrella insurance is secondary to your primary insurance. It pays extended liability damages beyond the limits of your policy – usually with additional coverage of $1 million or more. Adding this affordable coverage to your insurance portfolio could save you hundreds of thousands or even millions of dollars if you were ever to face a major lawsuit.
For more information about umbrella insurance and to find out how it could preserve and protect your family’s financial future, contact our office today.
