Auto insurance

Car Insurance Policy Review Can Save You More Than Monthly Bills | Local News

Most people don’t spend a lot of time thinking about car insurance.

Usually they set it up online or over the phone without knowing much about what the numbers on their policy mean and without anyone telling them what they are paying for.

People often only think of it in terms of what makes them “legal to drive”. Some are only concerned about the coverages that apply to their vehicle, especially if they have a more recent ride. While it’s important to comply with the law and protect your assets, it’s not the most important coverage in your auto insurance policy.

This would be your liability coverage. And without adequate cover here, you could be in a very difficult situation in the event of a calamity.

To succinctly break down your liability coverages, we’ll use a sample policy for John and Jane Doe. When they went to buy their policy online, they wanted the most affordable coverage. They were able to find a policy that says it has “Kentucky minimum liability limits” and “full coverage.”

Satisfied that it sounds good enough, they buy it, not knowing why they are paying. What they don’t realize is that in the event of an accident in which they are found guilty, their insurance company is only obligated to pay a small amount of money to the other party or to other parties. If the cost of this accident is more than this amount, the other party has the legal right to sue them for the difference.

Often you will hear someone say, “But I have full coverage!” The term “comprehensive coverage” generally applies to your own vehicle, covering it for damage caused by an accident. It usually has nothing to do with the liability you incur while driving your vehicle. Your liability limits are, by far, a much more important coverage to consider closely.

“Why is it?” you ask. Let’s say you fall into a wreck with another vehicle. This crash is your fault. Your vehicle is totaled, worth $10,000. You get “full coverage,” so after your deductible, you get $9,500 from the insurance company for your vehicle.

However, the other person involved in the accident suffered serious injuries, costing him $200,000. If you have a minimum liability insurance policy, you could be liable for $150,000.

This example shows why it is so important to consult your insurance policy to ensure that you are properly covered against this type of calamity.

So take the time to review your auto insurance policy to make sure you don’t find yourself in financial trouble because you aren’t properly covered.

Andrew Sargent is an insurance advisor for The Wright Legacy Group.

Andrew Sargent is an insurance advisor for The Wright Legacy Group.