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Deciding on Appropriate Coverage

When determining which coverage and limits of Auto Insurance you need, consider the following points:

How Much Insurance Do You Need?
Decide which coverages you need.  Here are some points to consider:

  1. Your financial responsibility
    Washington, Oregon and Idaho all require drivers to carry Bodily Injury Liability limits of at least $25,000 per person/$50,000 per accident. If your net worth exceeds $300,000, consider buying additional liability insurance. Most insurers offer limits up to $250,000 per person/$500,000 per incident for an additional premium. If you feel you need higher limits, a Personal Umbrella Policy will supplement your underlying coverage with an additional $1 million or more.

    Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. Ask your agent or insurance company representative for details.

    Every driver has a responsibility not only for driving in a safe manner, but also for injuries or damages he or she might cause to other people and their property.  Most states have laws which make it important -- or even necessary -- to have insurance. They require that you file a report if you have an accident involving bodily injury or substantial property damage. You then may be asked to present proof that you can pay damages up to amounts required by law.
  2. Your car
    If you drive an older model, its value might seem low compared to the cost of Collision Coverage.  In this case, you may decide not to buy collision insurance.
  3. Deductibles & your personal finances
    Collision and Comprehensive coverage usually come with deductibles. this means you agree to pay a specified. Options normally range from $100 to $1,000 per incident -- for damage to your car that occurs in any accident. Your insurance company agrees to pay the remainder of the cost of repairs, up to the vehicle's actual value at the time of the loss.

    By eliminating the cost of processing small claims, the company can provide the coverage at a lower price. You must decide whether you prefer a small deductible at a higher price, or a higher deductible at a lower price.
  4. Gap Insurance
    Often referred to as debt and financing coverage, Gap Insurance refers to the "gap" between what you owe on your auto loan or lease and the current market value of your financed motor vehicle. It is designed to pay the outstanding loan amount or lease residual payoff on a financed motor vehicle should you be involved in an accident and your vehicle is determined to be a total loss.
  5. Your agent and insurance company
    NW Insurance Council recommends talking with your agent or insurance company representative about your insurance needs to accurately determine the level of coverage that is appropriate for you.