How Wealth Affects Car Insurance Coverage Choices
It is true that having money or lacking it directly or indirectly affects people’s approach to various financial problems. Automobile insurance is there to provide financial assistance in case you suffer an insurable loss. Accidents, auto thefts, vandalism, floods and fires will not care if you are rich or poor, they will happen regardless. How you protect yourself is what you should be worrying about.
If you are wealthy, it may help you in choosing a right policy without budget pressures. Also, you will need to consider protecting your assets by purchasing the best auto insurance coverage for your circumstances. So, it is best we look at it separately for each type of provision you may want to buy.
Protecting Your Assets with Liabilities Coverage
These policies come in two parts. First part is there to pay for medical costs of injuries you caused to third parties. Considering the cost of hospital treatments these days the bill can be substantial depending on injuries and proceeding operations and treatments. Furthermore, there is a liability of causing death.
Second part mainly deals with damages you cause to other people’s cars and properties. This can include public property and loss of business claims. For example, you hit a bus on the road and it needs to stay in the garage for some time for repairs. Don’t be surprised if the bus company comes after you demanding consequential loss payments. Someone has got to pay for their losses.
The richer motorists are, the more they stand to lose in case of sizable car insurance liability claims. If you keep the coverage at state determined minimum levels, it would only give you around $50,000 cover in most states. Considering it would only cost you less than $100 to shoot it up to $500,000 you really don’t need to be rich to bulk it up.
Most people would rather sell their home and pay the people who suffered serious injuries due to their recklessness than have it on their conscience for the rest of their life. However, if you have assets the losses would be real. When your liability policy is exhausted without covering all the claims made, there will be one or two law firms ready to step in your pursuit if they know you have money. It is highly recommended that people should buy a comfortable level of liability car insurance, regardless of having assets or not.
Wealth and Other Types of Coverage
When you have sufficient money in the bank you would not worry about the total loss of your $5,000 worth automobile. In other words, you would be in a position to self-insure these losses. People may ask why you would be stingy about paying the premiums to fully cover such losses. The answer is simple, why should you.
Especially when you think the risks of suffering auto losses are low because you have a very good driving history and live in a safe neighborhood, you may rather keep the risks in house and keep the premiums in the pocket. Besides dealing with insurance claims and arguing with claim adjusters is not something many people look forward to. In addition, you will be facing further car insurance surcharges that will affect your premiums for at least three years should you make a claim.
You may really be better off in the long run keeping some of the small losses to yourself. But you cannot do this if you don’t have sufficient funds to deal with unexpected losses.
People with money are more likely to have a good level of health insurance compared to people on a tight budget and not keeping a stable job. If you have good medical cover, you may not need Personal Injury Protection. Otherwise, it would be highly advisable to buy this cover as well.
