While we all know we need insurance, few of us are happy to write the check; and no one wants over-pay. The idea is to get the coverage you need and to do so at the lowest price. The logic of that statement is clear and undeniable; but how do you determine what amounts and types of insurance policies meet your necessities?
Let’s begin with the understanding that an insurance policy is an agreement where the insuring company agrees, in exchange for a set premium, to indemnify you for covered losses. The contract (Policy) clearly states the risks that the policy covers, as well as the “Limits” of that coverage. For example lets take an auto insurance policy; as an insured you will have the option to select the maximum limits that your policy will cover in the event of a loss. In Illinois the minimum required limits are $20,000 per person for bodily injury per accident, $40,000 total bodily injury per accident, plus up to $15,000 for damages to property. While those numbers meet the state requirements, it is easy to imagine a loss where the damages far exceed those predetermined limits. Each day we pass cars that sell for two, four or even ten times that $15,000 cut-of-point. Clearly bodily injury claims can dwarf the price of even upper-end autos, with hospital cost potentially reaching hundreds of thousands of dollars. Yes, you are responsible for any damages that are in excess of the maximum stated amounts.
It is the potential for catastrophic losses that motivates people to select “Higher Limits of Liability”, and pay the resulting additional premium. There is no question that purchasing insurance to cover larger losses will better protect your assets, but for all but the richest few, we have to make best use of the finite dollars available. It is here where an agent should listen to you and them work out a strategy that works for your situation. No mater what level you select, someone could always sue you for more; so you must purchase a policy that you will be able to afford. As a long-time agent I will let you in on a small secret; it is quite rare that a client will be ordered to pay damages over the limits of their policy, but it is a weekly occurrence where a customer will have an accident after letting their policy get canceled. It is better to maintain a policy with basic limits than to have a policy with high limits that keeps starting and stopping leaving you with days, weeks or even months with no coverage.
For more than 50 years Urban Auto insurance has been working so had to find our customers the best company to fit their needs. We will compare rates at more than 20 different companies in order to find you the lowest price.
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