If there is one thing Clear Lake drivers ask us more often than anything else, it’s, “How much car insurance is right for me?” It is a question we answer nearly every day, and each time, the answer might vary a little differently from the person who asked before. That is because car insurance should always be customized to fit your needs based on an assortment of factors. Your policy should protect you against major financial losses. In this article, we will explore some reasons you need the right coverage and why having the right limits is so important.
To Repair or Replace Your Damaged, Destroyed, or Stolen Vehicle
When you find yourself in a car accident or hear the crunch of your car getting smashed by a tree, you know it is time to call your insurance company. As long as you have collision and comprehensive coverage, you can rest assured your policy will cover the damages. If you do not have coverage for physical damages to your vehicle, you could be stuck paying thousands of dollars for repairs out of your pocket. If your vehicle is deemed a total loss, you might have to absorb the loss and purchase another vehicle.
Here at Lillie-Couch Insurance, we know how much it costs to have a car in your garage. Whether you lease, own, or finance your car, your investment is worth protecting. We recommend both collision and comprehensive coverage to cover repair or replacement of your vehicle after an accident or other covered event.
Collision insurance is coverage that pays for damages after a car accident. A collision can include multiple vehicles, or it might just include your personal vehicle if you run into a tree or back into a light post.
Comprehensive insurance is coverage that pays for damages after non-collision events. Examples include theft and vandalism of your vehicle, as well as damage caused by fire, the wind, or hitting a deer.
Note that some drivers are under contractual obligation to purchase and maintain collision and comprehensive coverage for their vehicles. These typically include drivers who lease their vehicles or who have financed them with auto loans.
Deductibles and Coverage Limits
When you purchase your collision and comprehensive coverage, you will be asked to select a deductible. This is money you agree to contribute toward the cost of any future damage claims you make against your policy. Deductibles come in many sizes, usually between $100 and $1,000 depending on your insurer. The highest deductibles typically translate to lower insurance premiums but beware: You never want to choose an amount that you would not have the money to pay for in the event of an unexpected claim.
Insurers will automatically cover most vehicles for their actual cash value rather than an amount you select personally. The ACV accounts for depreciation of the vehicle and is used to determine if damage to a vehicle is worth repairing or if the insurer should simply reimburse the policyholder for the loss. Any reimbursements are paid at actual cash value minus the deductible.
To Repair or Replace Someone Else’s Damaged Property
If you damage someone else’s property in an accident, you will have to find a way to pay for the losses. Here in Wisconsin, drivers are required to carry a minimum of $10,000 in property damage liability insurance. This is designed to pay for at-fault damages to other people’s property and vehicles, but the limits are often too low to cover the full cost of damage repairs after a serious incident.
For example, if you hit a luxury vehicle, total a couple of cars in an accident, or plow through the living room wall of someone’s house, you can expect the damages to add up to tens of thousands of dollars. The victim’ insurance company may pay for the damages and then sue you to recover costs. Why only cover part of your liability when your property damage liability insurance can take care of nearly everything?
When you work with our team, we assess your coverage needs to ensure you get coverage that protects you against property damage lawsuits. Contact us for more information about property damage liability and to find out if you are underinsured.
Compensation for Harm You Cause Others
Car accidents happen in the blink of an eye. Whether you slide out of control on an icy bridge or lose a tire on the highway, if you cause a collision, there is a good chance there will be injuries. Wisconsin drivers are required to carry bodily injury liability insurance to compensate victims for injury-related expenses. As a driver, you have the option of choosing how much coverage you wish to purchase for bodily injury liability so long as it meets state minimum coverage requirements. Choosing limits that are too low, however, could put you at risk of being sued for any unpaid damages.
For example, if a woman is disabled after a car accident, she can sue the at-fault driver for compensation for medical bills, lost wages, emotional distress, and more. If the driver showed neglect in causing the accident, a jury might also impose punitive damages. Typically, an at-fault driver’s car insurance would pay the damages, but only up to the limits specified within the policy. Any unpaid damages more than those limits are still the responsibility of the driver, who may be forced to liquidate savings or make payments from future income.
We here at Lillie-Couch Insurance recommend that our Clear Lake area customers invest in high-limit bodily injury liability coverage. The right limits could protect your income and assets against a possible lawsuit.
Split Limits vs. Combined Single Limit (CSL)
Bodily injury liability coverage is available in two different forms – combined single limits (CSL) and split limits. A combined single limit is a single number on your policy. It represents in thousands the amount of money your insurance company is willing to pay all injured victims in an accident. A split limit is similar in that it also establishes a maximum coverage limit per accident. However, split limits also include another limit, which caps the coverage available per individual. Therefore a 250/500 split would translate to $250,000 individual coverage with a maximum of $500,000 total bodily injury coverage per accident.
Money to Protect You and Your Passengers against Uninsured or Underinsured Drivers
Getting injured in a car accident is bad enough, but it’s worse when an uninsured driver injures you. There are far too many uninsured drivers on the road, and if you are hit by one, recovering compensation for your injuries could be a challenge. Uninsured motorist coverage (UI) can protect you and your passengers, offering coverage if an uninsured driver injures you. We also offer underinsured motorist coverage (UIM), which helps cover your losses more than the at-fault driver’s liability limits.
Money to Help with the Little Things
Car accidents cost money, but with the right car insurance coverage, your out-of-pocket costs can be minimal. At Lillie-Couch Insurance, we offer a wide range of coverage to help with the ‘little things’ that can add up to big expenses. From towing charges and rental car fees to medical co-pays and health insurance deductibles, we offer medical payments and other coverage options to minimize your financial burden after a collision or other covered event.
Beyond Car Insurance
For most accidents and losses, a high-limit car insurance policy can provide adequate coverage for liability and other damages. There are some extreme cases, however, in which liability can climb to hundreds of thousands or even millions of dollars. In these scenarios, umbrella insurance can provide added liability protection to protect you from financial ruin.
For example, imagine causing an accident that injures a surgeon, permanently disabling him and preventing him from ever operating again. He sues you for medical bills and emotional damages, as well as the loss of many years of future income. The damages total $1 million, but you only have $250,000 of individual bodily injury liability coverage. How will you pay the remaining $750,000? Would you have to liquidate a lifetime of savings or make years of payments from future income?
If you had an umbrella policy, your supplemental liability would pick up where your car insurance leaves off. Once you exhaust the limits on your primary coverage, umbrella insurance begins paying for damages up to the limits of your policy. Coverage is highly affordable and in most cases provides an additional $1 million or more in liability protection. It could be what you need to protect your financial future.
For more information about umbrella insurance or the other coverage options available for your policy, contact our office today.