Auto insurance is critical for all drivers to carry. The state of California requires minimum coverage to meet drivers’ basic needs. This “15/30/5” rule requires drivers to carry at least $15,000 of coverage for bodily injury/death for an individual, $30,000 for the injury/death of more than one person, and $5,000 coverage for property damage.
However, these minimums may not be suitable for everyone – and the claim filing process is not the time to find out if you fall into that category. Even a minor accident involving a luxury vehicle could put you in danger of exceeding the minimum coverage. When you are shopping for auto insurance and trying to decide what coverage you need, you should take into consideration your driving situation, driving experience, and assets.
Where and how often you drive is important when deciding whether or not you should purchase additional coverage. If you use your car for work or for long commutes, you will be exposed to potential accidents often. You’ll also be more dependent on your car and need it repaired or replaced right away if an incident renders it unusable. Also, big cities tend to have higher theft and accident rates. By taking all the elements of your driving situation into account, you can decide whether it’s worth purchasing additional collision or comprehensive coverage.
Assets also play a role in deciding whether or not to increase coverage. If the resale value of your vehicle is below $3,000, you may not care for collision coverage. If you have other assets that you want to protect, you should consider increasing your liability insurance beyond the minimums required by law.
Naturally, confidence in your driving experience and ability will also help you decide whether you want extra protection as well. No matter your circumstances, its best to err on the side of caution when it comes to auto insurance. If a “worst case scenario” does come around, you’ll be glad you have the proper coverage.
This content is offered for educational purposes only and does not represent contractual agreements. The definitions, terms and coverages in a given policy may be different than those suggested here and such policy will be governed by the language contained therein. No warranty or appropriateness for a specific purpose is expressed or implied.