Car Insurance - Charlotte North Carolina
We are dedicated to providing the Charlotte, NC region with affordable insurance coverage and personalized care. As an independent auto insurance agency, we are able to offer you the lowest car insurance rates on a wide range of products by quoting with premier companies that are competing for your business.
What's Involved in the Process of Choosing and Purchasing Auto Insurance?
In Charlotte North Carolina, auto insurance coverage is mandatory, so the most important considerations are understanding how your policy works, the amount of coverage needed and the cost of coverage. At the outset, it is important to understand that the purpose of a car insurance policy is an instrument to protect your assets from accidents that are your fault, and if your policy covers it, to protect you from your own loss of property.
How Does Auto Insurance Coverage Work?
In North Carolina, including Charlotte, the minimum auto insurance coverage limits are 30/60/25. The first two of these numbers indicate coverage of bodily injury liability limits in thousands of dollars. The first number is the liability limit per person and the second number is the total liability limit per accident. To explain, we'll look at an example. Suppose you are in an accident that is your fault and you cause injury to two people. If each person sustains injuries amounting to $30,000 per person, then the car insurance policy should pay those claims. If three people are harmed in the accident, and each of them have a $30,000 injury, then the car insurance policy should pay for the first two people who submit their claim. In this case, the third person would have the option of suing you for their injuries. The third number indicates the maximum liability for property damage. In this case, $25,000 is the maximum amount of coverage.
Given the high costs of health care services it is important to evaluate coverage beyond the minimum limits, because these minimums could be exhausted very quickly and you would be liable for the remainder of costs in such a scenario.
As the name implies, liability auto insurance coverage is only for claims against you. It doesn't cover your own property or injuries. In order to cover yourself for damage to your own property, you will need to have collusion coverage on your policy. This type of coverage will insulate you from the cost of replacing or repairing your vehicle, and usually has a deductible which you must pay before coverage benefits apply.
Comprehensive coverage should also be considered when purchasing an auto insurance policy. This type will protect you from damage to your vehicle for incidents such as theft, fire, hail, explosion, vandalism among others.
Un-insured and under-insured motorist coverage is the last consideration for most car insurance policy holders. If covers the policy holder if damage is caused to you by a motorist who is un-insured or under-insured.
How Much Car Insurance Coverage Do I Need?
In it's role as a financial instrument, the first consideration of deciding the coverage limits of your auto insurance policy would be the cost of vehicles on the roads where you drive and the cost of health care services in the Charlotte North Carolina region. This should be cost should be considered within the context of the cost of the car insurance and the likelihood of an accident as determined by the number of miles you drive each year, and your own propensity to have an accident. As ideal as such an analysis would be, localized statistics are often unavailable, so the best first step in deciding car insurance policy coverage limits is to do so comparatively between plans.
This type of comparative analysis is something of a rule of thumb in the car insurance industry. The process is to evaluate a car insurance policy by comparing the difference in deductible and pay out limits with the difference in premium between two different policies. This type of analysis often reveals a greater value between two policies without requiring more extensive investigation. For example, suppose you were to compare a 30/60/25 liability car insurance policy to a 50/100/50 liability car insurance policy. Also, suppose the annual premium of the first policy is $500 and the annual premium of the second is $700.
At the outset we can see that the second auto insurance policy has twice the coverage limits for only $200 in additional premium. If we were to forecast this premium/benefit increase over a period of time, we can use a quantitative analysis to make a decision between the two policies. If after five years, you ever have an accident that is your fault, that is more than $1,000 more than the limits of the less expensive policy, then it would be advantageous to have bought the more expensive policy. The same is true for an accident within the next ten years that exceeds your policy limits by more than $2,000. And extrapolating further, at twenty years the break even is $4,000, and at thirty years the break even is $6,000.
A very similar type of analysis can be used in deciding which deductible to choose when purchasing collusion or comprehensive coverage. In this case, we would just compare the difference in deductible with the difference in annual premium. Suppose you have deductible choices of $500 and $1,000, and the difference in annual premium is $100. In this case, if you had to meet your deductible more than once every five years, then it would be better to choose the $500 deductible. If you had to meet your deductible less than every five years, then it's less expensive to choose the $1,000 deductible.
After you have determined the best value for liability coverage, the final consideration for auto insurance is an umbrella policy. This type of policy protects the holder from accidents that exceed the limits of the manadatory liability policy.
We invite all Charlotte, NC residents contact us if there is any assistance we can provide you in securing a car insurance policy that fits your needs.
Southeast Auto Insurance Agency
212 South Tryon St, Suite 1605
Charlotte, NC 28281
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