When do you know if you have the right coverage? Many drivers walk a fine line between finding affordable premiums and having adequate coverage. Here at Carrigan Insurance, we believe you can have both; but having the right coverage and ample limits are always the most important factor in the equation. Without it, your losses could quickly eclipse any savings generated from a ‘bare bones’ policy. In this article, we will explore the many reasons you need the right types of insurance coverage, as well as the right limits.
Your Vehicle is Damaged, Stolen, or Destroyed
A scratch, dent, or crack may not break the bank, but any extensive body work your car needs can be very expensive to pay for. Whether your car suffered hail damage in a storm or you crumpled it into a tree, repairs can total thousands of dollars. If you are unfortunate enough to suffer a total loss, you could find yourself buying another vehicle or looking for alternate forms of transportation.
Though you hope you never need to use it, car insurance can be a much-needed safety net if your vehicle is ever damaged or stolen. We recommend both collision and comprehensive insurance to protect you against financial losses related to your car.
Collision insurance is a form of physical damages coverage that pays the cost of repairing your vehicle after an accident. It can also help pay to replace the vehicle if it is deemed a total loss.
Comprehensive insurance takes care of damages to your vehicle when events other than collision causes them. This can come in handy if vandals victimize you or happen to hit a deer standing in the road. Other common damages covered by comprehensive insurance include fires, weather-related damage, cracked windshields, theft, and more.
Filing a Claim
If you file a covered physical damages claim against your collision or comprehensive insurance, the insurer will pay for repairs to your vehicle. If the repair cost exceeds the valuation of your vehicle, the insurer will reimburse you for your loss based upon the actual cash value of the car. An exception is made for antique and collector’s vehicles, which may instead be covered based upon an agreed value.
Regardless of the size of the claim, you will be responsible for paying a deductible toward the cost of repair or replacement. The deductible is an amount you select when purchasing your coverage. It can range from as little as $100 to as much as $1,000. Choosing a higher deductible means you will pay more for a claim but may enjoy lower premiums for your coverage. However, you should never choose a deductible that exceeds the amount you could reasonably afford to pay in the event of an accident.
While we here at Carrigan Insurance recognize that insurance for physical damages to your vehicle is completely optional in the State of Wisconsin, not having it could leave you without transportation and a loss of thousands of dollars. Furthermore, lenders often require borrowers to carry both collision and comprehensive coverage to satisfy the terms of a vehicle loan or lease agreement.
You Damage Property that isn’t Yours
As a driver in Wisconsin, you can be held responsible for any damages you cause to another person’s vehicle or personal property. To ensure that you can afford to cover your financial responsibility, the state requires you to carry a minimum amount of property damage liability coverage. Unfortunately, the minimum coverage is barely enough to pay for moderate repairs to a vehicle. If you happen to total a luxury vehicle, damage multiple vehicles, or run into someone’s house or business, you might get stuck with a big lawsuit for damages that exceed the coverage in your insurance policy.
Here at Carrigan Insurance, we will meet with you to discuss how much property liability damage coverage you should have. Generous limits help to shield your savings, income, and assets against liquidation, garnishment, and seizure if you are financially responsible for major property damages.
Continue reading part two of “How much car insurance is enough?”