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.
Continue reading part two of “How much car insurance is enough?”