Amidst the craziness and uncertainty that's going on out there due to Covid-19, many of us are following the suggestions of our local and state authorities on social distancing and staying at home. While staying home is the safe bet, I'm sure many of us have cabin fever and are ready to strangle our kids and other family members. There's only so much Netflix and t.v. we can watch.
Even as most are staying home and not driving, I've seen a lot of auto insurance commercials. They claim that they'll save you tons of money if you switch, but the question you should ask yourself is, "Is it worth switching to save a few hundred bucks a year?" Amusing and enticing at it may seem, the cheapest price may not always be the best option. In the end, you really end up getting what you pay for. Let me explain.
Usually, the way those companies try to save you money is by lowering your coverage limits and increasing your deductibles. They're not offering better coverage and really don't have your best interests in mind.
Here's a simple scenario which shows what can happen when you have low coverage.
You're in the car and unfortunately you get into an accident with another vehicle. There's a family of four inside and all are severely injured and have to be taken to the hospital. Their Mercedes Benz is totaled. The accident is deemed to be your fault, due to your negligence, so how does this situation pan out?
The simple answer is this. The injured party will file an insurance claim against you to recoup for the cost of their substantial injuries and damage to their car. If you have low bodily injury and property damage limits, your insurance will not be enough to pay for their injuries. As a result, they will seek remedy by going after your house, your other assets and even your wages.
Even $100,000/$300,000 bodily injury coverage won't suffice if all four suffered injuries over $100K and your maximum available limit is $300K. Now, does it seem wise to cheap out on your auto insurance coverage just to save a hundred bucks a year? I don't think so.
Insurance is for those worst-case situations when the shit hits the fan. You should have the best coverage in place that you can afford to protect your family and your assets. Why? Because all those things you've worked hard for are literally up for grabs.
I recommend getting $250K/500K bodily injury coverage, not only because it provides a decent amount of protection, but also because it makes you eligible for purchasing an umbrella policy with most insurance companies. In most cases, you can get an additional $1 million worth of coverage for only a few hundred bucks more per year. This will no doubt protect you and your family and in the end is the better deal.
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