FRIDAY, JANUARY 29, 2021
Buying Your First Car? Auto Insurance Comes Next
Perhaps you are about to buy your first car. Maybe your previous set of wheels belonged to your spouse or your parents, or maybe you’ve never had reason to own a car before now.
Taking ownership of such an expensive possession in your own right means you must take full responsibility for it, and this means investing in proper auto insurance. It’s not only a great way to protect yourself against the ramifications of accidents, but it’s also critical to have if you want to maintain your driving privileges.
Car Insurance Is Not Optional
As one of 49 states with mandatory auto insurance laws, Colorado requires all drivers to carry at least the following coverage:
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Bodily injury liability coverage (per person): $25,000
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Bodily injury liability coverage (per accident): $50,000
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Property damage liability coverage: $15,000
Also known as at-fault insurance, liability insurance is coverage that will compensate others who sustain harm when an accident is your fault. So, if you rear-end another vehicle at a stoplight, then liability coverage will allow you to compensate the other driver for their injuries and vehicle damage, since the accident was your fault in the first place. If you fail to carry then mandatory insurance required of you, then you will face penalties if you get caught.
You Can Customize Your Coverage to Your Advantage
Colorado’s minimum insurance requirements are only what you are required to carry. You can augment your mandatory coverage with numerous other benefits, such as:
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Physical damage insurance (Collision & comprehensive coverage)
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Uninsured/Underinsured motorist coverage
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Personal Injury Protection (PIP)
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Rental car coverage and roadside assistance
Determining Your Coverage Limits
Your car insurance needs to be customized in order to provide you with optimized protection. While it might mean buying extra coverage, you will appreciate this investment in the long run. After all, it will help you minimize your losses following an accident or other loss.
There are a couple of terms that you need to keep in mind when setting up your plan:
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Your coverage limits denote the maximum amount of money your insurer will pay for any claim—physical damage, liability, etc. You want to choose coverage limits that will minimize your losses from an accident. However, you don’t want to buy coverage that is so high that it makes your policy too expensive.
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Portions of your plan will include deductibles. The deductible is an amount of money that you agree to pay towards a claim yourself, without obligating your insurer to pay. The higher your deductible, the more you agree to pay for your own losses.
Getting your first auto insurance policy doesn’t have to be difficult if you have the help of your agent throughout the process. They will help you determine how best to expand your coverage on top of your minimum coverage limits, while still striking the right balance of coverage and price.
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It is not be used as a substitute for competent insurance, legal, or tax advice from a licensed professional
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