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How Much Auto Insurance Do I Need if I Own a Home

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On the face of it, some drivers may be wondering what trying to figure out how much auto insurance to buy has to do with owning a home. It makes sense if you remember that the reason for buying auto insurance coverage is to protect yourself from being personally responsible for paying for the damage you are responsible for causing in an at-fault accident.

Ideally, you will want to buy as much auto insurance coverage as you can afford. Limiting your coverage to the minimum level of protection mandated by state law may not be enough to protect the assets you have accumulated over time, including your home. Your third party liability coverage should be approximately the same as the value of your home.

Liability Auto Insurance Basics

Liability auto insurance coverage is part of a policy and this type of protection is required in most parts of the United States. The policy provisions include coverage for bodily injury and property damage claims. Separate policy limits apply to bodily injury and property damage liability protection.

Bodily injury liability insurance coverage pays for claims made by the occupants of the other vehicle following an accident. It pays for medical bills, rehabilitation costs and lost wages.

Property damage coverage looks after paying for repairs to the other vehicle involved in the accident. It also covers the cost of repairing or replacing public property damaged or destroyed in the event.

Liability Auto Insurance and Policy Limits

The policy limit that you choose reflects the level of protection you have in place. The insurance company will pay for damages up to this amount. If the amount of damage you caused is at or below your policy limit, your insurance company will cover the claim.

The issue with your policy limit comes into play when the amount of damages caused in the accident is higher than your available coverage. In that instance, your insurance provider will still pay out up to the policy limit, but you will be responsible for paying the difference personally.

Assets, such as your home, may be at risk if you need to pay a judgment entered against you following an at-fault car accident. Rather than expose your home to the risk of having to be sold to pay for damages following an accident, buying a policy which provides adequate protection is a much better choice.

Shop Around for Best Auto Insurance Coverage Rates

Once you have an idea of how much liability auto insurance protection you need to have in place, you can start shopping around for coverage. Getting quotes from several providers and comparing rates will help to ensure that you have enough insurance in place without spending more than you have to for it.

Go online to find out how much it will cost to buy auto insurance coverage which is at least equal to the value of your home. That is the best way to protect your most valuable asset.

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