How Your Personal Assets Impact the Amount of Car Insurance Coverage You Need
There are three categories of personal assets: tangible assets, financial accounts and income-generating assets. Tangible assets include items like your car, house and any valuables, such as antiques or fine art. Financial accounts are things like your life insurance policy, checking account, savings account and retirement account. Income-generating assets involve things that make you money, such as a business you own or a real estate investment.
Depending on the level of car insurance coverage you carry, your personal assets could be at stake if you are at fault for a traffic accident and your insurance does not cover the accident victim’s physical injuries or the property damage from the wreck. The type of car insurance where your personal assets could be at stake is known as liability insurance. Basically, the more personal assets drivers have to lose (expensive home, cars, boats, investment accounts) the more liability coverage they should have. This is because if they cause an auto accident and do not have enough car insurance to cover property damage that resulted from the collision or the accident victims’ physical injuries, then they are at risk of being sued and having their personal assets seized.
In addition, it is important for drivers to have comprehensive car insurance and collision coverage. This type of insurance covers the driver’s vehicle against loss and damage. Comprehensive car insurance protects vehicles against non-accident-related damage, including fire, theft, natural disasters and vandalism. Collision coverage covers the repair or replacement of your vehicle if you hit another car, crash into an object or are in a rollover accident.
It is a good idea for anyone to have as much car insurance coverage as he or she can reasonably afford. This is especially true for drivers with high value personal assets.
For more information about car insurance coverage, including what to do if you are in a wreck caused by an underinsured or uninsured driver, continue following our Atlantic City and Cape May law firm’s blog.