Before You Hit The Deer…in 90 Seconds or Less

People tend to know the commercials for their car insurance company better than they know their coverage, so here’s a fly-by primer of how to understand your auto insurance with an extra special surprise at the end that’s bound to make you laugh.

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2 thoughts on “Before You Hit The Deer…in 90 Seconds or Less

  1. Hi Tim,
    Love the video. I’m looking into adjusting my limits on my Bodily Injury Liability insurance, but I’m trying to determine if I really need the 250k/500k coverage you talked about in the video – the premiums seem pretty steep. I’m in my 20’s, married, have joint income of $60,000/year, not many assets, and we rent an apartment. I saw the following from an article from SmartMoney.com called, “How Much Auto Insurance Do You Need” and I wanted to hear your thoughts.
    “How much coverage you need is a function of what assets you have to protect. If you make $30,000 a year and rent your apartment, $50,000/$100,000 should suffice. But if you make more than $75,000 a year, own a house worth $150,000 and have $40,000 in mutual funds, you should consider at least $100,000/$300,000 of coverage.”
    Thanks!

  2. Steve G.,
    I’m glad you enjoyed the post. I am familiar with the “you shouldn’t pay for liability coverage for anything more than your assets” logic, but I feel it’s a little outdated. Ordinarily, I am an insurance hawk, never recommending people over-insure or pre-insure, but there is another factor at play in this situation. Although it may not be an extremely high likelihood, a successful young professional who finds him or herself on the losing end of a court battle could find their future compensation at risk in addition to their assets. If “the bottom line” becomes an issue and you simply don’t have the money for the higher liability limits then, by all means, go with lower insurance levels. But in an increasingly litigious society, I find that the higher levels of coverage provide supplemental sleep-at-night benefit worth the typically slight increase in premium.
    One other thing to consider… and I’ll choose my words carefully here… when considering the enormous legal muscle of the insurance industry, who do you think is more likely to get top-notch representation: the guy with $50k of liability coverage or the guy with $250k… or $1.25 mil (with the umbrella policy)? That shouldn’t be a leading factor in the decision making process, but it’s a reality to consider if you’re on the fence.

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