How Much Auto Coverage Should I Consider?
Auto Insurance only provides coverage up to policy limits — beyond that, you’re personally responsible for damages related to any accident you cause. This is a key consideration, especially if you have assets you want to protect.
Here are a few factors to consider — and some things to keep in mind — as you choose auto coverage limits:
Third-party liability coverage: Your assets and income
Third-party liability coverage pays damages you cause to others in a covered loss — up to the policy’s limits. When selecting those limits, it’s important to know the value of assets you want to protect. Add up the value of everything you own: your primary and vacation homes, savings and investments, cars and recreational vehicles, and any collectibles. Ideally, choose liability limits that are high enough to protect the total value of these assets.
Comprehensive and collision coverage: The value of your vehicles
If your car were damaged or totaled, would you have the financial resources to pay the costs of repair or replacement out of your own pocket? If not, consider taking out comprehensive and collision coverage. If you lease or finance your vehicle, your lender may require a minimum amount of coverage.
You can tailor your auto policy and select the insurance you want with a full menu of optional coverage choices that include:
New Car Replacement Coverage
If your car qualifies as a total loss within the first two model years of ownership and with fewer than 24,000 miles, New Car Replacement Coverage® can help. It will reimburse you for the cost of replacing it with a new one of the same make and model — less any deductible.
Customized Equipment Coverage
When a car doesn’t come from the manufacturer with all the equipment you want, you might install aftermarket features like alloy wheels or a sound system. Customized equipment coverage can help if this add-on equipment is damaged, and it’s available for any vehicle with comprehensive and collision coverage.
Personal Liability Umbrella Coverage
Farmers® personal umbrella coverage provides additional liability limits over and above the liability limits on your personal auto policy. This affordable coverage can be purchased in $1 million increments up to $10 million.
Get the Most Value Out of Your Auto Policy
What, where, why and how you drive all can affect the cost of your insurance. Here are some ways to help reduce your premium: