When buying car insurance, you must consider your net worth because it points to your ability to withstand financial losses if the car undergoes any damage or meets with an accident. Therefore, your net worth has a direct relation to the amount of coverage provided by your car insurance policy. Along with your net worth, consider the miles you drive on average to work out the liability limits of your car insurance policy. Having adequate coverage for liability arising from injuries or property damage caused by you can save you thousands of dollars. If you ram into another vehicle and injure the passenger and driver besides damaging the vehicle, you must pay for the cost of the vehicle, and the medical bills of both injured. Easily, you could end up paying $100,000 if you do not have enough insurance coverage.
For any type of car insurance, you can reach out to Miramar Insurance & DMV Registration Services. They can advise you about the kind of coverage that should be adequate for you based on your net worth and driving pattern, along with your driving history.
Liability coverage linked to your net worth
To determine your net worth, add up the values of all your assets as well as investments towards retirement accounts and other types of investments. Add up all your liabilities comprising of debts you owe and subtract this figure from the value of your assets to determine your net worth. When buying car insurance, you must ensure the coverage is enough to protect your net worth. In other words, in the event of causing bodily injuries and property damage, you should not pay anything from your pocket but instead, the money should come from the insurance company.
However, most insurance companies have a cap on the maximum liability coverage which varies between the companies. If you need a higher coverage to maintain parity with your net worth then you should buy an umbrella insurance policy. The additional coverage includes your car and home and the policy is available in increments of $1 million.
Full coverage is a good idea
Remember that liability coverage helps you pay others, but what happens to the expenses incurred for your injuries and repairing your car? To recover the expenses for your own damage and the cost of your medical treatment you should go for full coverage of your car insurance which includes all expenses for others and yourself. This type of car insurance policy offers collision and comprehensive coverage together with liability coverage. Regardless of who is at fault, the insurance company pays for the damage to your vehicle. Collision coverage pays to others while comprehensive coverage pays for damage to your car due to theft, vandalism, or deer collision.
Pay attention to optional coverage
Insurance companies offer various types of optional coverage to take care of a wide range of situations that can damage your car.
Although every driver may experience different kinds of situations, the most common type of optional coverage applicable for all is underinsured motorist coverage. It helps to recover the cost of a driver who hits you and does not have adequate insurance coverage to pay for the damages.
Miramar Insurance & DMV Registration Services, 7094 Miramar Road Suite 102, San Diego, CA 92121, (858) 397-2076