Benefits of Increasing Your Auto Insurance Coverage Limits

When’s the wrong time to adjust your insurance coverage limits?

After a car accident.

Once a car accident takes place, your current auto coverages apply. Even if you raise your limits post-accident, you won’t have additional funds to help cover your claim. Instead, the only way to protect yourself entirely is by being proactive about your car insurance policy.

No one wants to pay more for car insurance. But sometimes, paying a little more each month for significantly better coverage makes a lot of sense. If you’re considering adjusting your car insurance coverages, this article’s for you.

What do you need to know about raising car insurance limits? Read on to find out!

What Insurance Coverage Limits Do You Need?

Let’s talk about the different coverages you should be carrying on your car insurance policy. Once you have the right coverages in place, you can begin to look into raising insurance coverage limits.

Here’s a short breakdown of the different coverages that comprehensive car insurance policies could include:

  • Collision and Comprehensive car insurance coverages
  • Bodily injury liability coverage
  • Personal property coverage
  • Uninsured motorist coverage
  • Gap coverage
  • Personal injury protection coverage
  • Supplemental medical payment coverage
  • Rental reimbursement coverage
  • Roadside assistance coverage

Along with securing the right coverages, you should also freshen up on what to do after a car accident. Once you’ve filed a police report and taken care of your injuries, you can talk to your insurance company about filing a claim. If you have the right coverages in place, you’ll be able to fix your vehicle quickly.

Benefits of Raising Car Coverages

What coverages are you going to pay for repairs to your car? Both comprehensive and collision insurance exist to protect your vehicle. If you have a newer vehicle or a car worth more than $3,000, it’s a good idea to carry both coverages.

Unlike liability coverages, you’re not going to be able to raise the coverage limit for comprehensive and collision coverages. This is because insurance companies are only going to pay out the actual cash value of your car.

For instance, let’s say that you have a vehicle worth $10,000. If you got into a car accident and your vehicle was totaled, you could receive up to $10,000 for your claim.

However, the car insurance company isn’t going to pay you more than your car’s worth at the time of the accident. That’s why it’s a good idea to also purchase Gap coverage or new car coverage.

Do You Need Gap Coverage?

Gap coverage is there to help protect individuals who are still paying for their vehicles. When you’re still making car payments, you could owe more than the car is worth.

Let’s use the same example from the previous paragraph. You have a $10,000 car, and it’s totaled in an accident. However, you still owe the dealership $13,000 worth of payments.

Your comprehensive and collision coverages will be able to help cover the $10,000 car value. Gap coverage is what’s going to take care of the $3,000 difference. In addition to Gap coverage, you can also look into getting new car protection.

Gap car protection is a special policy add-on that only certain providers offer. Usually, high-end carriers can provide new car protection.

If you have a new car, and it’s totaled in an accident, you can still get the full price of your vehicle. It won’t matter if you’ve been driving the car for months; new car coverage covers any financial gaps depreciation causes.

Why Increase Liability Coverage Limits?

So far, we’ve been talking about the different coverages that can help repair or replace your vehicle. But what about liability coverage? Should you increase those limits as well? Absolutely.

It’s always a good idea to carry high bodily injury liability limits. Bodily injury liability is the coverage that will pay for the other driver’s medical expenses. If you cause an accident, liability coverage helps keep you safe financially and legally.

Besides paying for the other drivers’ medical expenses, property damage liability can also pay for their vehicle. If you wind up crashing into a stationary object, such as a fence, property damage can also cover that.

If you don’t have the proper liability limits, and you cause an accident, you could wind up in legal trouble. Instead of dealing with a lawsuit, be proactive by raising your liability limits.

The best part is that liability coverages are one of the least expensive parts of your policy. Increasing your coverage by $100,000 might only cost $5 or more a month!

Seriously, you owe it to yourself to call your insurance agent today. Ask them to quote you different liability coverage limits, and notice the price difference. In some bizarre cases, raising your limits can lower your policy premium.

Always Carry Uninsured Motorist Coverage

What would happen if you get in an accident with an uninsured driver? The at-fault driver might receive a ticket and face legal complications. However, if they don’t have insurance and they don’t have a lot of assets, you’re the one who will be in financial trouble.

When the other driver can’t pay for your car’s repairs, you could be left on the hook for all of the damages. Even if your insurance company helps cover some of the repair bills, your policy premium could go up.

What’s the solution? Always carry uninsured motor is coverage. In some states, it’s referred to as underinsured motorist coverage.

Uninsured motorist coverage will help pay for your medical bills and property damage. It’s one of the best ways to protect yourself from the uninsured drivers out there on the road.

Unlike liability coverages, uninsured motorist coverages are pricey. However, you’ll have peace of mind knowing that you’re financially secure if the worst should occur.

Upgrade Your Auto Insurance

Are you ready to secure your livelihood? Raising your insurance coverage limits means protecting your future when it comes down to it.

Instead of worrying about the cost of adding coverages or increasing limits, call your insurance agent today. Let them provide you with real-time quotes, so you can find out exactly how much increasing your limits will cost you.

When you have the hard numbers, you can make the best decision to protect yourself financially and legally. If you need some more advice or want to read another article, look around the rest of our site.

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