Historically, many consumers have been advised that it is only necessary to purchase higher than minimal limits of protection on an auto insurance policy when the consumer owns a home.
This is seen by many insurance agents as poor advice.
The California minimum insurance coverage required for bodily injury if the $15,000 per person.
The minimum property damage protection is $5000.
These limits are extremely low and are significantly lower than many add their states.
In fact, almost all other states require higher limits of protection for bodily injury and property damage than California.
It is relatively easy to see that $5000 in property damage protection is a minimal amount.
The average cost of a new vehicle in California a significantly higher than $5000.
When driving down and.
It is easy to see the average cost of the vehicles on the road can exceed 15,000.
If a consumer were to purchase an insurance policy and property damage protection by thousand dollars and later it neither vehicle value $15,000 the consumer could potentially personally liable the $10,000 vehicle value not covered by the policy.
The reason that many agents have previously advised clients higher level of protection when they own a home is to protect potential equity that the consumer in the home.
This is bad advice.
Any consumer in a financial position to carry more than minimal protection on an insurance policy would be advised appropriately to do so.
By doing so the consumer can protect themselves from personally paying out for damages caused that are above and beyond the amount covered on an insurance policy due to the client been underinsured.
A good example of this would be advising a newly married couple to purchase higher than minimum insurance protection.
Although most newly married couples do not own a home in the event of a claim that causes damages higher than the amount covered on a policy.
This newly married couple would be left with no option to purchase a home due to judgments or pending judgments for the excessive damages.
Purchasing higher than minimal protection on an auto insurance policy is well advised for any consumer in a financial position to do so.
Purchasing the higher protection on a policy can save the consumers potential personal injury or property damage claims that exceed the amount or limit of coverage on the policy.
The premiums associated with the additional protection are minimal in comparison to the amount of additional protection.