There is such a thing as being overinsured or having too much insurance coverage. You don’t want to pay for more coverage than you will use, nor do you want to underpay and still be vulnerable should an insurance claim or accident occur. Even though a minimum liability may be required by your state by law, it doesn’t necessarily mean it’s the right answer. Most people understand the need to be covered more than the minimum.
The maximum isn’t always necessary, but keep in mind if you often travel with more than just yourself in the car. Although we hope it never happens, the more people involved in an accident, the worse. Make sure everyone who could be involved in an accident—whether your fault or theirs—is properly protected.
Again, if you’re unsure of how much coverage you’ll need, schedule a consultation with your insurance agent. When you do, here are the main points of insurance you’ll cover: liability, personal injury protection (PIP), and comprehensive and collision protection.
Liability Coverage covers bodily injury and property damage to others in the event of an auto accident involving you and another driver. Personal Injury Protection is the protection that DOES cover you and a passenger (bodily injury) in the event of an accident. Lastly, comprehensive and collision protection provides coverage for vehicle repairs or replacement of your vehicle as to the result of an accident.
By law, most states require you to carry auto liability coverage. Liability coverage protects other drivers if you have a collision with another driver. Auto insurance companies will set limits within your liability protection on a per-incident and overall coverage provided (i.e. 100/300 are common limits set wherein they will cover up to 100,000 per accident and 300,000 overall per policy period (usually 6-months).
In some states, comprehensive coverage (non-collision damage from vandalism, fire, theft, flooding, etc.) is not required and depending on how valuable your car is, may not be necessary. An old car or beater car may not be worth insuring for comprehensive damages but still is vital to protect for the sake of a collision with another driver. This could help you reduce costs, but again, it is up to you as the policyholder and your state’s laws.
What If You’re Dually-Covered?
First and foremost, this is a conversation best discussed with a professional insurance agent. To give you an idea of dual coverage or overlapping coverage, let’s step away from auto insurance. If you carry supplemental insurance like AFLAC or major medical insurance, there are provisions in your policy that would cover you in a vehicle accident. Having PIP on your automobile policy gives you the same benefits. Therefore, in this example, you would be dually-covered.