Do You Really Have Full Coverage?
How do you know if you have enough liablity coverage? There are two factors that will determine how much liability coverage you should purchase.
1. How much am I worth if someone caused an event that would require me to collect from them?
2. How much of my assets do I want to risk of I or a covered family member has an accident?
Let's first answer the question How Much Am I Worth? You have an accident in your care that is not your fault, and you sustain at least $200,000 in loss of work with pain and suffering. The person that hit your car thinks they are fully covered with the Missouri sate minimum coverage.
You will be able to collect $25,000 form that persons insurance company. You would then have to sue the individual that caused the accident and hope they have the assets to pay you. It could take years and large legal expenses to collect any more than the $25,000.
Why have your insurance company protect you from the uninsured/under insured person. You can purchase increased limits of uninsured / under insured insurance. I would suggest you buy as much as your can - $500,000 should be you minimum coverage. Single limit coverage would be even better! This will also provide you with at least $500,0000 of liability coverage if you or other insured person causes an accident. It is also the minimum underlying coverage most company's require for a $1,000,000 liability umbrella policy.
Most of us have homeowners policies that have replacement coverage on our homes. The odds are that you will have a care accident before you lose your home. You should be fully covered when your are driving.
If cost is a factor, consider increasing your deductibles to cover the cost for the better liability coverage.
Contact us to create a financial plan to determine if you should consider changing your auto/home/ and liability coverages.
Topics in coming weeks:
Why should I carry a liability insurance policy?
How can I afford that much coverage?