Deciding how much auto insurance you really need is a challenging question. Most states require drivers to purchase a minimum amount of insurance, but that could leave you financially vulnerable if you are in a major crash. Unless you drive an older car with little value and have no assets, the minimum is not enough. You need enough auto insurance to protect your finances.

The cost of additional insurance is minimal compared to how much an expensive collision could set you back. Many experts recommend that you have enough bodily injury liability coverage to cover your net worth. Other factors to consider are your driving history and the value of your car.

Legally, you can drive by purchasing the minimum coverage required for the state you live in. For most people, though, that’s not nearly enough.

The State Minimum Is Not Enough

Although you can legally drive with just your state’s minimum coverage, you should consider purchasing higher limits if you can afford it. It’s generally recommended that you purchase enough liability insurance to cover the value of your assets. For example, if your assets are worth $185,000, a 100/200/50 liability policy likely would be enough.

That is $100,000 in bodily injury liability per person, $200,000 in bodily injury liability per accident and $50,000 in property damage liability. You would need more if your net assets are more.

You also should consider increasing your liability coverage if you have any teenage drivers on your policy.

Consider An Umbrella Insurance Policy

For extra liability insurance, you should consider purchasing an umbrella insurance policy. For a relatively small amount, you can purchase an extra $1 million or more in coverage.

Aside from liability insurance, you also should consider collision and comprehensive auto insurance coverage. Collision insurance covers damage to your if you crash into another car or something on the side of the road.  Comprehensive coverage covers you in case of theft, fire, falling objects, explosions or other unexpected troubles.

Collision insurance and comprehensive coverage are required in most lease contracts. Anyone who owns an expensive car should have collision and comprehensive insurance.

The agents at the Leliaert Insurance Agency can help you determine the best auto insurance coverage for you.

Standard homeowners insurance policies help pay medical expenses when someone is injured in your home or if you are liable for damage to a neighbor’s property. But that may not be enough insurance coverage. Umbrella insurance provides another layer of coverage to help you protect your assets.

Umbrella insurance works the same way for auto or renters insurance. It usually provides much higher limits than standard policies, but costs relatively less than many other forms of insurance.

For example, if you have auto insurance with a liability limit of $300,000 and you are sued for $500,000, you could lose $200,000. An umbrella policy could cover that.

You can’t have just an umbrella policy. You must a minimum amount of standard policies before you can purchase an umbrella policy.

What is not covered in an umbrella insurance policy?

If you are injured in your home or in an auto accident, it does not cover your injuries. It doesn’t cover damage to your personal belongings. An umbrella policy usually will not cover your home office property.

What else is not covered under an umbrella insurance policy? An umbrella policy would not cover property damage or injuries if you are driving a recreational vehicle that is not covered. It may not cover you if you own certain pets that are considered unsafe. It also doesn’t cover intentional or criminal acts.

If you ran a daycare from your house, that would not be covered. Because that is a business and that would have to be covered by business insurance.

Who should purchase an umbrella insurance policy?

Anyone who is worried that their standard insurance doesn’t cover them sufficiently or anyone concerned about protecting their wealth should consider getting an umbrella insurance policy.

Homeowners with property that poses greater liability risks should consider umbrella insurance policies, such as:

• Homeowners with swimming pools.
• Homeowners with hot tubs.
• Homeowners with trampolines.
• Homeowners with fire pits.
• Homeowners with treehouses.
• People who own a boat or recreational vehicle.
• People who entertain frequently in their homes.
• Landlords.

The agents at the Leliaert Insurance Agency can help you determine if an umbrella insurance policy is right for you.

Reading a homeowner’s insurance policy can be overwhelming, especially for a first-time homeowner. It is important that homeowners understand the declaration page in their insurance policy so they know what is and is not covered. After all, a home is usually a person’s most valuable asset.

The declaration page in your homeowner’s insurance policy, typically the first page or pages of a policy, is a concise summary of the coverage provided. Understanding the declarations page will help ensure you get the most out of your policy.

You can quickly see how you and your home are protected from covered losses by reviewing the declarations page. The information provided typically includes the insurance company information, the address of the policyholder and the location of the insured property and the unique number identifying the property and coverages included and your lender if you have a mortgage. Make sure all of the information is accurate.

Here is some other important information included on the declarations page:

• Coverage included section that explains what the insurance includes, such as coverage for your dwelling and anything physically attached to your home, such as a deck, garage or patio. It also includes other structures on the insured location, such as pools, gazebo or fence.
• Personal property, such as furniture and TVs. Certain items, such as jewelry and fine arts, have restricted coverage limits. If you have high-value jewelry, fine arts or other such belongings, you likely will need riders.
• Coverage limits that provide the maximum amount your insurance provider will pay for each type of coverage. Typically, natural disasters such as earthquakes and flooding, are not covered.
• Loss of use is coverage for if you need to stay in a hotel or elsewhere while repairs are being made to your home for a covered claim.
• Personal liability coverage provides protection with listed caps in case you are sued for an accident that occurs on your property.
• Medical payments for others that covers you up to a certain amount if someone is hurt on your property.
• Endorsements, or changes to your policy, are coverages you can add to protect parts of your home not covered by standard insurance.

A declaration page also can be used as proof of insurance.

You should carefully review your declarations page when you buy an insurance policy to make sure the information is correct. You do not want to discover when filing a claim there is an error.

If you’re having trouble reading your policy, an insurance agent can go through it step by step. Agents at The Leliaert Insurance Agency can help you review your insurance to make sure it is up to date and based on your specific needs.