Having the right Auto Insurance Coverage

If you drive a car then you likely are required by the state you live in to carry a certain amount of auto insurance on your vehicles. Many people are insured and do not really understand what their insurance actually covers. There are many parts to an auto policy and your insurance agent can help you understand what exactly these coverages mean. You may be paying money for a coverage that does not fit your specific needs.


For instance, if you drive a vehicle that is 20 years old and is worth $1500 do you really need to pay for comprehensive and collision coverage? The amount of money you are paying may quickly add up and be more than the car is worth. It would make sense not to carry these insurance coverages.


The other coverage I see that is expensive and many people have too much of is Uninsured Motorist Bodily Injury or UMBI. This coverage comes into play in the event you are injured by another driver who was at fault and does not have car insurance to cover your injuries and medical bills. While it is important to have this coverage in my opinion, many people have higher limits than they actually need. Someone with health insurance coverage and a 1000 deductible probably does not need UMBI limits of 100/300. A more sensible approach would be to carry lower limits that reflect what your actual needs are. This could save hundreds of dollars each year.


Knowing what your car insurance covers and what you actually need is very important these days. Many drivers are unaware of their policy limits and could be paying extra for coverage they do not need. Speaking to your insurance agent can help you get the right policy coverages and balance your budget as well.