Fresh smells, clean seats, and a host of new gadgets — we all love getting a new car. We’re so happy when we drive it off of the lot, but then come the “hidden costs” like insurance, parts, maintenance, gas and more.
Do you have enough auto liability coverage? If not, you could be on the hook financially for any excess costs if you are at fault in a car accident.
Liability coverage protects you if you are found responsible for another person’s injuries, expenses or damages. Bodily injury liability covers expenses related to driver or passenger injury. This includes medical bills, pain and suffering, rehab costs, lost wages and other associated costs. Property damage liability covers damages related to another person’s property, including their car or any physical structure.
Even if you have both forms of liability insurance, that still might not be enough. Bodily injury is especially expensive. An ambulance ride alone averages around $1,000, and a simple emergency room checkup can be upwards of $3,000. If someone is seriously injured or killed, the bill could exceed hundreds of thousands — if not millions — of dollars. For property damage, a totaled car is at minimum $25,000 worth of damage. Even small dents can mean several thousands in repairs — and you are responsible for paying any excess cost over your liability coverage.
Minimum, state-required limits are not sufficient to protect you. You should carry enough liability coverage to protect the sum of your assets, add the value of your home plus autos plus toys plus investments. A minimum of $300,000 is recommended if you own a home.
So don’t lowball your liability coverage. You can save on your auto insurance in other ways, but you need to make sure your policy is protecting you as intended with adequate liability coverage. Ways to reduce your insurance costs include selecting a vehicle that has higher safety standards and therefore will cost less to insure. Vehicles that are not frequently stolen are cheaper to insure; you can find statistics at the National Highway Traffic Administration. Choose a car that has lower repair costs; you can research this on Consumer Reports.
Other ideas for saving money include bundling home and auto with the same insurance company, paying in full instead of monthly installments, taking care of the little things yourself so you have fewer “dings” on your record from small claims, bumping up comprehensive and collision deductibles and reviewing your policy to ensure you have the correct vehicles and drivers listed.
Most insurance companies provide good driver, good student and senior discounts; also check for military and teacher discounts.
Your rate will improve if you continue being a safe driver with a good record. If you drive just a little, let your insurance agent know so you can receive credit for a low-mileage vehicle. Using a driver-monitoring device can save you 20-25 percent more, and they are not as creepy as they seem. You use them for about 30 days and then send them back — and you can save a bunch on your insurance.
Insurance rates keep increasing due to the higher-cost electronics in newer models and the unfortunate trend of more distracted driving, so do your due diligence to ensure you’re getting the best possible rate.
Angelyn Treutel Zeringue is president of SouthGroup Insurance Services, a CPA, PWCAM and licensed Trusted Choice insurance agent. Reach her at www.southgroupgulfcoast.com, (228) 385-1177 or firstname.lastname@example.org.