Have you ever looked at your auto insurance policy and wonder what all those numbers really mean? How about if they will work in your favor if you ever are in an accident and need to use them? Well I’m here to hopefully help alleviate some of those concerns.
To make things simple, you want enough coverage to protect your assets and your income if anyone in your household were to hurt someone in an accident. Many people just pick the same coverages their parents or friends have or whatever is the best price. The problem is everyone’s number is different. When I say assets, I mean liquid assets and any equity in property you own. They can also garnish 25% of your paycheck until the bill is paid in full. I don’t know about you but I like to live off 100% of my income.
My recommendation is to add all that information up and see what that number equals. For many people it’s well over $500,000 once you tie your income in. To calculate your income you take your annual income X years left until retirement / 25% = income at risk. Once you have a total number of everything, that’s how much bodily injury coverage you should carry on your auto insurance. Look on your auto policy and see what your bodily injury coverage are. It will look something like $100,000/$300,000/$100,000. We are looking at that first number. If your number is more than your coverage, then you need to call your agent and discuss options. It’s more affordable than you think. For more information, please call Staci Howell at 704-256-1980 or email me at Staci@myagentstaci.com.