There are several ways you can purchase auto insurance. You can buy it over the internet, you can call an 800 number, or you can call an insurance agent. In some cases, you can buy it at your bank or credit union!
It’s not surprising you can buy it in so many ways. After all, there are hundreds of insurance companies that sell auto coverage in your area. How do these companies differentiate themselves? Some brag about their superior service when you have a claim, some tout how easy it is to buy from them, and often auto insurance companies try to compete on price.
Some people believe auto insurance is just a commodity. It’s not!
You’re not buying a soda. You’re protecting your financial well being. The choices you make could affect you for the rest of your life. A person with a good driving record will pay three, five, even 10 times less than a driver with a couple of tickets, an accident or who has been convicted of driving under the influence.
Auto Insurance: How Much Should You Buy?
Most states require you to have auto insurance, but they don’t require you to have much. In states that have mandatory auto insurance laws, All you are required to buy is a little bit of liability coverage. This is so you can pay for the damage your car does to other cars and other people who are not in your car.
How much are you required to buy? In Colorado the mandatory auto insurance laws say, the minimum coverage needed is liability that provides 1) $25,000 per person involved in an accident, 2) $50,000 for all persons in the accident, and 3) $15,000 for damage to the other vehicle(s) involved. That’s not much. In fact, it’s next to nothing.
The minimum amount of insurance required by most states is not much. Seriously consider getting more coverage in order to protect your financial health. Request an account review and let one of our professionals take a look at your coverage amounts.
If you just buy the minimum coverage required by law, you could be leaving your assets at considerable risk. How far do you think $15,000 will go if you total someone’s Lexus? Not far enough!
There Are Six Distinct Coverages In An Auto Policy
Bodily Injury Liability – This pays the medical and other expenses of those people injured or even killed in an accident you cause. This is required by Colorado law, with a minimum coverage of $25,000 per person involved in an accident and no more than $50,000 for all the persons in the accident. Consult with your professional agent about this!
Property Damage Liability – This covers the damage your car causes to property. Usually, that’s the other car or cars involved in the accident, but it also covers damage you do to any object you hit; garages, buildings, lampposts, fences, etc. This is also required by Colorado law, with a minimum coverage of $15,000.
Collision – This is for damage done to your car when it collides with other vehicles or other objects.
Comprehensive – This covers damage to your car resulting from something other than a collision. For example, damage caused by vandals or a wind-blown tree hitting your car. It also includes coverage for theft.
Collision and Comprehensive coverage is subject to a deductible.
In most case, whatever coverage and deductibles you have on your car would apply when you rent a car. Check your policy to see which coverage extends to the rental car.
