N. Raleigh | (919) 878-7786
S. Raleigh/Garner | (919) 661-1100
 

Oftentimes, drivers consider legal requirements when purchasing car insurance; however, they shouldn't ignore their personal assets at stake.

When it comes to asking yourself, “How much car insurance do I need to buy to cover my assets?" the value of your personal assets can help you come up with the right numbers.

What Are Personal Assets?


Simply put, personal assets have monetary value. Examples of personal assets include, but aren't limited to:

Tangible assets such as:
- Homes and other real estate.
- Cars.
- Fine art, antiques, and other valuable collections.

Financial accounts such as:
- Checking and savings accounts.
- Life insurance policies.
- Retirement accounts.

Income-generating assets such as:
- Businesses.
- Real estate (for example, if you're a landlord).

Your Assets and Liability Insurance

You should understand that liability insurance covers bodily injury and property damage that YOU cause to OTHERS.

Most states require some form of liability insurance or proof of financial responsibility—and this is to your benefit. Because we're addressing bodily injury and property damage to others, liability insurance is where YOUR assets really come into play.

Generally, a driver with few personal assets (e.g., someone who does not own a house and has a moderate savings account) doesn't need through-the-roof liability coverage, as it's unlikely the injured party would be able to successfully get them to cover any financial differences.

On the other hand, if you have a ton of personal assets (think a million-dollar home and a hefty savings account) but you don't have enough insurance to cover the other driver's physical injuries and property damage, they could sue you and seize other assets.

Essentially, the more you stand to lose, the more liability coverage you should purchase.

Your Assets and Comprehensive/Collision Insurance

Where liability insurance covers damages that you cause to another's injuries and property, comprehensive and collision insurances cover damages and loss caused to YOUR car.

Comprehensive auto insurance covers loss and damages to your vehicle that aren't accident-related, including:

- Natural disasters.
- Fire.
- Thefts and vandalism.
- Falling objects.
- Hitting or being hit by animals (e.g. deer, cows, birds, etc.).

Collision insurance covers repairs and/or replacement costs to your vehicle if you:

- Crash into another vehicle.
- Crash into another object.
- Roll over.

Now, how do your assets affect comprehensive and collision insurance?

Basically, comprehensive and collision insurance covers YOUR vehicle (i.e. your asset); this means, the newer and/or more valuable your automobile, the more comprehensive and collision coverage you should carry.

On the other hand, if your car is old and/or doesn't have much value, paying for comprehensive and collision (when you aren't legally required to*) might not make much financial sense. As you consider the coverage cost, try to determine whether you might pay fewer out-of-pocket expenses making the repairs than you'd pay in comprehensive and collision premiums.

When in doubt, talk with your car insurance provider about the value of your vehicle vs. the need for comprehensive and collision insurance.

* Most states and insurance companies require comprehensive and collision coverage if you're leasing or don't yet own your vehicle outright (i.e. have a loan with a financial institution).

Getting Vital Protection

Regardless of how many personal assets you have, most auto insurance experts advise purchasing as much coverage as you can reasonably afford.

Sit down with your car insurance provider and talk about the following:

- Your state's legal requirements.
- Your budget.
- What you stand to lose if you don't have enough coverage.

Contact ACF Insurance Services Inc today at 919-878-7786 for all of your Raleigh auto insurance needs!

(Source:dmv.org)
Posted 4:33 PM

Share |


No Comments


Post a Comment
Name
Required
E-Mail
Required (Not Displayed)
Comment
Required


All comments are moderated and stripped of HTML.
Submission Validation
Required
CAPTCHA
Change the CAPTCHA codeSpeak the CAPTCHA code
 
Enter the Validation Code from above.
NOTICE: This blog and website are made available by the publisher for educational and informational purposes only. It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional in your state. By using this blog site you understand that there is no broker client relationship between you and the blog and website publisher.
Blog Archive


View Mobile Version
We have the expertise to find you the right coverage at the right price. 
Get Started   arrow
  • AAA
  • Builders Mutual
  • Discovery
  • Foremost
  • Lilitz Mutual
  • National General
  • Progressive
Blog IconFrom Our Blog

READ MORE   arrow
Testimonial IconFrom Our Customers
READ MORE   arrow
© Copyright 2018. All rights reserved. Powered by Insurance Website Builder.