How To Choose Auto Insurance Coverage Limits?

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   David G. Pipes, CLU®, RICP®

   Business Development Officer, T.D. McNeil Insurance Services, Fresno, California

   This is the most important question a person can ask about auto insurance.  Your liability limits are critical.  The rule of thumb is to estimate your net worth and add two years of income.  The problem is that a claim could easily exceed that.  A recent accident resulted in almost a $1 million settlement.  It is doubtful that person had that much insurance.  That much insurance is, however, available and not very expensive.  In combination with an umbrella you could have in excess of $2 million in liability coverage.  When selecting uninsured motorist limits you need to select limits that reflect how important those riding inside your car are.  You may well want to match your uninsured motorist limit to your bodily injury limits.  When selecting the deductibles for the comprehensive and collision insurance you will find that the differences in price are not great.  I recommend taking a $1000 deductible for both comprehensive and collision.

   Answered on May 14, 2014

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