By Andrew Lees, Boston MA
Young families, especially those with new children should take special care in their auto insurance purchases. One of the primary focuses of insurance is the protection of assets from risk, and a new family is usually involved in the building of assets, which need to be guarded for the long haul.
Liability insurance protects you if you cause an accident. If you are frequently involved in car-pooling, the risk of potentially causing injuries to others increases, so make sure you have adequate liability insurance coverage. Since many who are starting a family are also accumulating significant assets, it is important that these assets are well protected by insurance. The best approach may be to supplement all of your liability insurance coverages with an umbrella policy, which will cover accidents caused by your auto as well as incidents involving injuries, which occur at your home.
Newly married people often have their own autos, checking accounts and insurance policies. It is best that the auto insurance coverage be consolidated so that both names are on each vehicle’s insurance policy to make sure there is proper coverage afforded if one spouse drives another spouse’s vehicle.
When newlyweds shop for insurance, it is important to get several quotes for the same type of coverage to ensure the best possible deal. There are several components of an auto insurance policy that young couples should be aware of when making quote comparisons.
One of the most important aspects of your auto insurance policy is the liability coverage. Depending on which state you live in, there may be minimum limits of liability that apply, requiring you to purchase a certain amount of coverage before you can legally drive a car. In most cases, the minimum required limits are not adequate to protect the assets of a young family.
Consider your liability limits very carefully and purchase as much coverage as you can reasonably afford. The liability section of the policy pays for injuries or property damage you cause when driving your vehicle. It pays others on your behalf when the accident is your fault. Because injury claims can be very expensive, it is important that you purchase enough insurance to protect your assets. If a judgment is rendered against you, there could be severe financial consequences, as you would be held liable to pay for any damages that exceed your policy limit.
The liability coverage is divided into two sections. The first is called bodily injury coverage and it pays for injuries to others, while the property damage section pays for property damage to others. This includes damage to other vehicles, or to other objects that your car might hit like buildings, light posts and fences.
The physical damage section of your policy pays to repair your vehicle regardless of whose fault the damage is. The collision part pays to repair or replace your car if it is damaged by striking another car or a stationary object, and the comprehensive part pays for damage from other kinds of losses like hail, theft, or fire. This is important coverage to have when starting a family, as the loss of a vehicle can be a significant financial burden. If you have a loan on your vehicle, the lender will require physical damage coverage.
Medical payments coverage, also known as Personal Injury Protection or PIP is something that you should definitely consider for your auto insurance policy. This is also a required coverage in many states and it is important because it will pay for medical bills for the driver of an insured vehicle and any passengers, regardless of who is at fault for the accident.
Be sure to review your insurance needs with a qualified agent or broker and make sure they are aware of what your assets are in total, so that a proper decision can be made about your auto insurance coverage.
