How Much Car Insurance Do You Need?
Your car insurance contract is a collection of various insurance contract rules that cover you in different ways. Here is the breakdown:
These policies help to cover liability and costs when you are in default and accident. The money goes to the people who hit you, but they do not cover the people in your car.
Bodily Injury Liability (BIL)
This policy will be paying medical expenses for those injured in the crash you are mistaken. BIL policies are often described as “20/50” or “100/300” policies. These numbers represent the maximum amount the insurance contract will pay for one person’s injury and the maximum amount for all injuries the other occupants of other cars incur. For example, a 20/50 insurance policy will pay up to $ 20,000 for a single injury, up to a total of $ 50,000 for everyone injured in the car you struck.
Property Damage Liability
If you make a mistake in an accident, this policy will be paid for damage to other cars. Because property liability is also called third number in addition to BIL, the 20/50/10 responsible package covers up to $ 10,000 due to damage to other cars.
The following policies will cover you and your card in an accident:
Personal Injury Protection (PIP)
This will cover the medical expenses of you and your passenger after the accident. This policy also applies to lost wages if you lose time at work due to injury.
Uninsured/Underinsured Motorist Coverage
If you struck by someone without insurance or minimal compensation, this will help cover the cost.
This policy will cover the repairs of your car after an accident.
This policy covers the costs if your car is stolen or damaged outside of an accident.
Almost all states require automobile owners to subscribe to car insurance, and most states require minimum amounts for various insurance. If you do not have insurance, the state can confiscate your car. You can check this website for details on the minimum value of your state.
The minimum coverage does not need to be everything you should have. For example, New Jersey requires automobile owners to take 15/30/5 liability insurance. If involved in a serious accident, that person’s medical expenses may exceed $ 15,000 or the group’s expenses may exceed $ 30,000. In addition, since the average car price is now just over $ 20,000, there is not much for $ 5,000 for car repair.
You are at hook when the cost exceeds your coverage limit. That is why so many people choose policies that cover more than necessary minimums, especially if they have assets that they can use for repair and medical payments.
A good rule of thumb: Make sure you are insured for an amount equal to the sum of your assets (add the dollar value of your home, your car, savings and investment).