How Much Car Insurance Do You Really Need?
We spend a lot of time talking about health insurance and life insurance, but what about car insurance?
Who’s going to pay for repairs on that "remodeled" SUV when your teenager accidentally drives it through the garage door? Or what if your uncle forgets to put your car in park and it rolls into the neighbor’s brand-new convertible? Would you be covered, or would you have an angry neighbor and a financial mess on your hands?
Whether you drive a nice car or an older model, you want to make sure you’re covered in case life decides to hit you . . . or your car. To protect yourself, it’s important to know the types of insurance, how car insurance works, and how much car insurance you really need!
But before we talk about the difference between basic, extended and premium auto insurance options—and which ones are right for you—let’s cover some basic insurance terms.Auto insurance deductibles typically apply per claim. So, if you have another fender bender two months later, you’ll have to pay your deductible again. But in most cases, $500 is a steal compared to what could potentially have to come out of your pocket!
On the other hand, if you have a $1,000 deductible and only need $750 worth of repairs, you’re responsible for the entire amount because the repair cost doesn’t exceed your deductible.
You will likely have two different deductibles under your auto insurance policy—one for collision and one for comprehensive coverage.
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