You may think that because you carry full coverage insurance and have state required limits on your personal injury protection and liability policies that you are fully protected in case of an accident. You may be wrong.
It is very possible that an accident could exceed your coverage limits, especially if you are only carrying the limits on your personal injury protection and liability that your state requires. Many of the state requirement limits have been in place for several years and have not kept up with the cost of medical care and property values.
You might find yourself in a situation where you have less coverage than the cost to replace property, or the cost of current medical care for injuries and a long-term hospital stay.
A simple solution to this would be to contact your car insurance company and discuss your car insurance rates with your agent. You can raise those limits and still keep your cheap car insurance premiums.
If you happen to find yourself in an accident where you have exhausted your limits, you can expect to pay for any additional expenses from your own pocket. If your vehicle repairs exceed your coverage, you will be required to pay the difference to complete repairs, or you will not have the vehicle released to you from the body shop.
If there are additional medical and property bills to pay, you will be responsible for those as well, if you have been found to be at-fault in the accident.
If your car insurance company considers your vehicle a total loss and you have a loan or a lease on it, you may be responsible for the difference between what the insurance company writes the check for, and the loan payoff amount. This is a “gap”, and there are insurance policies, called Gap Insurance, available to cover this difference.
The best coverage is what is necessary to protect you. It is in your best interest to review your car insurance policy at least once a year, and talk with your agent to see if you need additional coverage, or if you are eligible for additional discounts on your insurance rates. It is always a good idea to get the best possible cheap car insurance that you can.