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Will your auto insurance policy be enough?

by guest on August 23, 2012 · 4 comments

in expenditure, Guest Posts

car accident insuranceThe State of Oregon has a mandatory insurance law which requires every vehicle owner to insure their vehicle. If a driver ignores the liability insurance law, he can face fines up to $300 and a one year suspension of his driver’s license. This is a big price to pay for going without car insurance. Can you imagine not being able to drive to work? Many people got their license suspended and continue to drive. This is a recipe for disaster and you shouldn’t do this if you plan to avoid incarceration.

Owning and operating a personal vehicle is the second biggest expense in most families. The cost of gasoline, auto insurance policy, repairs, maintenance, and car payments add up to a significant monthly expense. We can put off minor repairs for a short time, but gasoline and insurance are a real daily necessity. We can’t avoid insurance expense so we need to take the time to shop and minimize that bill as much as we can.

We also need to make sure our insurance policies are updated every few years. Most of us start with the minimum policy, but as we earn more money and increase our net worth, we need to review to see if the policy is enough.

Here is Oregon’s minimum liability requirement

Bodily injury and property damage liability $25,000 per person;
$50,000 per crash for bodily injury to others; and
$20,000 per crash for damage to the property of others

Let’s take a closer look. The minimum per crash damage to the property of others is only $20,000. Many cars now cost much more than $20,000 and if you cause an accident that involves multiple vehicles, this is not going to cover it. When you are a poor student, you won’t have any assets for the plaintiff to go after. However, if you have been working for a while and have a house and other investments, then it’s only prudent to increase your coverage.

These days it’s fast and easy to obtain an auto insurance quote online. There are several websites that will help you compare different policies and find one that fits your situation. Some of these providers can even find you an option that may save you “an average of $200 per year.” It is important to compare policies because you want to be sure that you are covered appropriately based on your situation.

Is your auto insurance policy enough to cover a potential scenarios such a multiple vehicle accident?

Photo credit: Flickr: DuncanDuncan1

 

{ 4 comments… read them below or add one }

jim August 24, 2012 at 12:43 pm

I’ve always opted for higher liability coverage on my auto insurance and I think its worth it. We get the $100k/$300k level of insurance and its not really that much more expensive than the minimum.

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John August 31, 2012 at 2:57 pm

I don’t have collision coverage right now, but we do have an emergency fund and not very expensive cars.

Reply

Mark September 1, 2012 at 5:57 am

You have to have it, necessary evil you could say. My son (he was 17 at the time) was in an accident his car and the other were totaled. What we did not know was the other party claimed a back injury. Our insurance company asked him to provide the documentation from a doctor and they would give him a settlement. He refused and decided to have back surgery. I’m sorry about this, he died during the surgery.
His widow sued everyone Hospital, Doctor, and my insurance company. The amount she wanted was way over our cap. However my company stuck to their guns and demanded the medical records that showed the back injury was from the accident. (they were not) in the end they paid out for the bruise he received in the accident.
I’m sorry this man died but I suspect he wanted my insurance to pay for the surgery to repair a preexisting condition
You never know when your going to need the insurance and a good company too

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retirebyforty September 2, 2012 at 8:11 am

Sorry to hear that. It sounds like a bad situation for everyone involved. It’s good that your insurance company stuck to their gun and everything worked out for you.

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