Why auto insurance rates are so high
The liability involved when you are in a car accident is phenomenal, which is why automobile insurance costs so much. You need to know what is required in your state and what's worth paying for. Comparing the differences between the two can save you a few dollars. The following covers what types of coverage are available and gives you some money saving strategies.
Liability coverage is required in almost every state and is split into two parts: bodily injury liability and property damage liability. Bodily injury liability provides insurance against lawsuits. Most states require a minimum of $25,000 per person and $50,000 per accident. If you want to protect your assets in the event of a lawsuit, you'll need as much as $300,000 worth of coverage. Property damage liability covers damage done by your car to other people's cars and property. The standard minimum
for this is $10,000.
If you're a victim of a hit-and-run accident, you'll need uninsured motorist coverage. Uninsured motorist coverage allows you to collect lost wages and payments for any medical expenses that result from an accident with an uninsured motorist. Do not skip over this type of insurance, especially since there is an increasingly high number of drivers who have dropped their insurance coverage because of high premiums. And you should especially include this if you don't already have a comprehensive medical plan and long-term disability insurance.
Uninsured motorist coverage should not be confused with underinsured motorist coverage, which is the part of your policy that pays after the other driver's coverage has been used up.
You must also have comprehensive coverage if you have an outstanding car loan (which many of you do). Comprehensive coverage covers theft and damage to the car from riots, fire, flood, falling trees, and theft.