Should I Buy Full Coverage Insurance?

two-people-talking-near-fender-bender-loewy-lawPurchasing insurance might very well be the most important decision you make. If you’re in a wreck and are uninsured you could be put in a whirlwind of debt. If you cause an accident, then you will be held financially responsible for damages. This means you could lose some of your assets. However, many people still choose to drive uninsured and risk falling into financial hardships. More importantly, if you cause an accident and cannot cover someone else’s injuries, you leave them injured and unable to take care of themselves.

Texas requires that drivers have a minimal amount of liability insurance. Wrecks can lead not only to damages on your vehicle, but also medical expenses and lost wages. So when you decide to purchase insurance, what is a reasonable amount to spend? Should you get full coverage insurance?

Here is the levels of insurance coverage you can purchase starting with the minimal liability coverage all the way to comprehensive or full coverage insurance.

Step 1: What You Have to Buy -Texas Minimal Insurance Coverage Requirements

Drivers have minimal liability to cover damages they cause to other parties. This will not cover any damages to your car, your medical expenses, or your lost wages. This is the minimal amount of insurance coverage you have to have under Texas State Law.

The most basic coverage you can have is called 30/60/25 coverage. This means you pay your insurance provider to cover $30,000 dollars towards each injured person in an accident that you are at fault for, this goes up to a maximum value of $60,000, and then you are covered for $25,000 in property damage to the other party (for the other party’s vehicle repairs or damage to any other property).

Step 2: Personal Injury Protection (PIP) and Medical Expense Coverage

When you go to buy your insurance policy, the insurance provider has to offer you a minimal PIP coverage. This covers medical expenses, 80% of lost wages, and reasonable household duties you could not perform while injured. The minimal amount the provider will offer is $2500. You have to decline the minimal PIP coverage in writing otherwise you have PIP coverage . The only way to decline PIP coverage is by signing a contract stating that you have declined the minimal amount of PIP coverage.

You can get a $2,500; $5,000; or $10,000 PIP coverage policy so be sure to think about what you would want in case of a wreck. You can also purchase additional medical expense coverage on your policy to cover just your medical bills in case you are hurt and then your PIP coverage can go to lost wages.

Step 3: Uninsured or Underinsured Motorist Coverage

This is another type of coverage you will want to invest in. It pays for medical expenses and property damage when you get hit by a driver who either doesn’t have insurance or who doesn’t have enough insurance to cover your damages and medical expenses. This has a $25,000 dollar limit per person and $50,000 limit per accident.

Deciding to take the Next Step Into Full Coverage Insurance

Once you’ve decided on these three types of coverage, now it’s time to decide if you want to take any steps further towards full coverage. Having the minimal amount of liability, a healthy amount of PIP, and uninsured/underinsured motorist protection will ensure your life’s stability in the event that you cause an accident and you suffer medical injuries, cause injuries to other parties, or suffer injuries or property damage by a driver who doesn’t have insurance. However, it will not cover property damage to your property if you cause an accident, if something like a storm damages your car, or you’re the victim of auto theft. That’s where full coverage comes in.

You have to buy full coverage insurance if you still owe money on your car to a lender. If you don’t owe money to a lender, then you need to figure out how much your car is worth (use Kelley Blue Book or similar sites) and how much you are or you would spend on full coverage. If your yearly cost on full coverage would be more than 10% of your car’s worth, then it’s recommended that you downgrade to a smaller just the coverage types we’ve already discussed.

If you want to ensure that you’ll have your repairs paid for and the money you need to have your car replaced whether or not it’s your fault, you need full coverage.

Step 4: Collision Coverage

Purchasing this coverage will cover repairs and replacement in the event of a car wreck. You’ll have to pay a deductible ranging from $0-1000 and then your provider will cover the rest of the damages.

Step 5: Comprehensive Coverage

This coverage covers damage in from events other than a collision like storms, falling objects, pet damage, auto theft, or broken windows and windshields. It works the same as collision coverage: you pay a deductible and then your provider pays the rest of the damages.

After You’re Covered, We’re Here For You

After you get your insurance policy, if you are in an accident or suffer an injury, you might need a personal injury lawyer to ensure that you get the compensation you need to get back on the road. Insurance companies have a reputation for minimizing the damages they have to pay (that is the nature of their success as a business). Knowing how to make an ensures that you’ve done everything you can to get the compensation you need.

If you make a claim and think you’ve been unfairly treated or if you just want someone who knows the insurance game inside and out, call us for a free consultation and we will ensure that you are justly compensated.