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How Assests Can Affect Your Auto Insurance

How do my assets affect my personal injury liability and damage to property liability?

Personal injury liability covers the medical expenses incurred by another party through your fault in a car accident while property damage liability insurance is for expenses incurred to repair the other parties’ property you have damaged or destroyed. Believe it or not, the richer you are, the more liability auto insurance coverage you have. Take this for example – when you have a physical injury coverage of about $200,000 and have an asset e.g. a house worth $500,000 in addition to a large sum of money in the bank and in an unfortunate incident you cause a serious car accident that goes beyond your $200,000 limit, the injured could sue for the remainder. In this case, they could very well win and what happens is that the court may confiscate your house or your money in the bank to cover for the difference. In short, the higher liability insurance you have will help protect your assets from being seized to cover for expenses arising from a car accident you caused. It would however be difficult to make a successful claim on a person with a lower liability insurance and has few assets, hence, the more assets you have the more you have to lose. Hence, having higher liability insurance is the wise thing to do.

And what about other auto insurance coverage, how do they affect my assets?

You will be amazed to find out that the opposite of the above is true when it comes to other coverage options such as collision coverage, comprehensive coverage and medical coverage. Why? It is because with these types of coverage you are actually better positioned to take in the costs of hefty expenses in car repairs, theft, medical costs and so forth, without worrying about getting sued. It is however advisable to carry a good enough amount of such car insurance just to be on the safe side in case you are face with a huge bill from a repair shop or a hospital.

– To protect my assets, how much auto insurance should I carry?

The amount of car insurance coverage that you should have should be as much as you can possibly afford. It does not matter how few or lots your assets are. In doing so you are adequately protecting your assets from seizure but also give you peace of mind knowing you are financially secure even in the event of an unforeseen event. Also, the cost of auto insurance becomes gradually less expensive with a higher coverage.

As a final word, if you have many assets, consider an umbrella policy which comes in as soon as all your insurance limits have been exhausted. To learn more on this topic and to answer many other car insurance related questions, just enter your zip in the above slot and get started. You will also get loads of information on cheap car insurance in your locality and also get free online insurance quotes if you up for it.