When shopping for auto insurance, many people make a decision based solely on the premium. While, this can sometimes work as a money-saving technique, more often than not it can leave you with large (and costly) gaps in coverage. We’ve compiled a list of 5 things you need to look at when shopping for auto insurance, besides premium.
1. Liability Limits. This is what pays out to the other person in the accident if you are at fault. This liability coverage protects you from having to pay out of pocket for someone’s bodily injury or property damage. Liability Limits can be set up as Split Limit Coverage or Combined Single Limits. With Split Limit Coverage, your liability limits will appear as three different numbers. Ex: 250/500/250. In this example, you would have up to $500,000 bodily injury liability coverage with the caveat that each of the people in the other car are limited to $250,000 each. You would also have up to $250,000 of property damage liability coverage. Combined Single Limits Coverage is set up as one number. Ex: 500. In this case, you would have up to $500,000 liability coverage for bodily injury and property damage. However, this $500,000 can be divided up any way it needs to be. There are no sub-limits for bodily injury, like there is with Split Limit Coverage. Technically, Split Limit Coverage gives you more overall coverage when you include the property damage liability coverage, but the Combined Single Limit Coverage is much more flexible!
Liability Limits are so important because that is what protects you from having to pay for the other person’s bodily injury or property damage out of your own pocket. Additionally, if you were to be sued and found liable, this coverage would protect you and your assets. Having high liability limits is especially important when you own large assets like homes, boats, businesses, etc.
2. Underinsured/Uninsured Motorist Coverage. We just talked about the the coverage that you have to pay for someone else’s injuries or property damage. In a perfect world, everyone would have the highest liability limits possible, but that is not the case. There are many people that drive with only the state minimum limits (25/50/25) or no insurance coverage at all. If you were to be in a major accident with someone who is at fault and has state minimum coverage, that $25,000 of bodily injury coverage is going to be exhausted almost immediately in medical bills. Additionally, if you drive a nicer, newer car $25,000 is not going to be enough to replace your car if it is totaled. If you have Underinsured and Uninsured Motorist Coverage, you have a back up plan.
3. Deductibles. Just like with your homeowner’s insurance, deductibles play a role in the amount of premium that you pay. The higher your deductible is, the lower your premium will be.
4. Medical Payments. Medical Payments Coverage pays for reasonable medical expenses and funeral services on a no-fault basis. We all know how quickly medical expenses can add up, so this is important coverage to have.
5. Extras. Things like Rental Reimbursement and Roadside Assistance make a difference in your premium. While they are nice to have in times of need, not everyone wants or needs these coverages.
As you can see, there are a lot of things to think about besides premium when purchasing auto insurance. To have one of our Client Advisors take a look at your current policy or put together an auto insurance proposal, call 843.763.4200 or submit a request online here.