Do You Have the Auto Coverage You Need?

Getting just enough coverage to meet your state’s auto insurance requirements might mean a few more dollars in your pocket in the short term—but if you’re involved in a crash, minimal protection can result in a major financial drain.

Almost every state requires you to buy auto liability insurance, which covers damage you do to another car and medical costs for those injured in an accident you caused. But it’s important to make sure you have the coverage you need to protect your own assets and recover financially after a crash. Work with your insurance agent to determine the right amount of liability protection to fit your needs.

Here are some steps to help you ensure you have the auto insurance coverage you need:

1. Determine how much liability coverage you need

Crashes generally cost more than the minimum limits, according to the Insurance Information Institute, so it’s a good idea to get more liability insurance than required. Talk to your insurance agent about how much property damage and body injury liability coverage you should purchase.

2. Elect your coverages

Once you’ve determined your liability insurance needs, consider:

• Comprehensive coverage provides reimbursement for damage caused by something other than a collision, like hail, a fallen tree or vandalism. In deciding whether or not to purchase comprehensive coverage, consider the market value of your car, as the coverage cost may outweigh the benefits. Deductibles may apply.
• Collision coverage covers physical damage to your insured vehicle caused by a collision, regardless of fault. Like comprehensive coverage, ask your agent about the market value of your car before making a decision. Deductibles may apply.
• A personal umbrella policy pays out when your underlying coverages are exhausted. While every situation is different, you may want to consider an umbrella policy if you have substantial assets to protect or a young driver on your policy.
• Uninsured and underinsured motorist coverage may compensate the policyholder, or a covered family member, if they are the victim of a hit-and-run or an accident cause by an uninsured/underinsured driver.
• Medical payments coverage pays for the treatment of injuries from the incident.

3. Choose your deductible

Once you elect your coverages, it’s time to choose a deductible—the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.

4. Review your auto insurance policy regularly

Review your auto insurance policy whenever something changes in your life that might affect your coverage, such as buying a new vehicle, adding a new driving or making changes to your commute.

For more information, contact your AAA Insurance agent at 1-800-222-1469, visit AAA.com/Insurance, or stop by your local AAA office.