While it may not be the first thing you think about when purchasing auto insurance, you should definitely consider coverage limits. Most people either choose to disregard limits or opt for the lowest possible coverage. Although this may save money on annual premiums, these strategies could prove to be risky should you experience an accident. To better understand why MA auto insurance coverage limits are important, we’ve put together this overview:
What Are Coverage Limits?
In Massachusetts, you are required to have 4 types of coverage: (1) Bodily Injury to Others; (2) Personal Injury Protection; (3) Bodily Injury Caused by an Uninsured Auto; and (4) Damage to Someone Else’s Property. Each type of coverage has a limit – this is the amount the insurance company will pay for a claim. Your insurance company will not pay more than this amount when you file a claim. By law, you are required to purchase minimum limits for coverage. The problem is that, more often than not, these minimum limits will not be sufficient if you are involved in a major accident.
Danger of Low Coverage Limits
Herein lies the risk – if you are in a major accident and damages or personal injury exceed the policy limits, you could be held liable for the difference. For example, if your coverage limit is $250,000 but a claim is filed for $300,000 worth of injuries, the difference would be $50,000. When you think about injuries sustained in accidents and the high cost of medical care, the costs related to an accident can easily escalate beyond minimum coverage limits. This is why it is so important to buy coverage limits beyond the minimum requirements. The cost for additional coverage is relatively negligible, so it’s always best to err on the side of caution and increase your coverage whenever possible.
Consider Purchasing an Umbrella Policy
Another consideration is electing for umbrella coverage insurance – protection that is above and beyond the limits of your required coverage. Umbrella policies protect you personally, rather than being directly tied to your vehicle. Umbrella insurance policies are surprisingly affordable, especially considering the amount of coverage that you can receive.
More on Why MA Auto Insurance Coverage Limits Are Important
While you may think that you are initially saving money by opting for the lowest possible coverage, in the long run it could cost you much more than you can afford! That is why MA auto insurance coverage limits are important to understand. A slight difference in annual cost could be what saves you from severe financial hardship in the future. The more you know, the better you can plan ahead! If you would like to learn more about coverage limits, increasing your coverage, or purchasing an additional umbrella insurance policy – please contact Gorman Insurance.