Are The Minimum Auto Insurance Requirements Enough?

The minimum auto insurance requirements in the United States and Canada are dictated by law. In the United States, auto insurance covering liability for injuries and property damage done to others is mandatory in most states. Enforcement of the requirement varies from state to state and pricing is dependent on location. Penalties for not purchasing auto insurance also vary by state, but often involve a substantial fine, license and/or registration suspension or revocation, as well as possible jail time in some states. Canadian law dictates that the minimum auto insurance requirement in Canada is coverage of up to $200,000 in damages, except in Quebec, which only requires $50,000 in damage coverage.

Asset Valuation

In the case of an accident that your insurance policy does not cover, your assets will be at risk of seizure. Although it may seem counterintuitive, valuating all your assets will help to select a policy that will protect all that you have to lose.

The Dynamic Strategy

When purchasing auto insurance, one of the best strategies may be to purchase the minimum and then, considering your assets and needs, purchase further insurance.  Auto insurance acts as protection against the unforeseeable and sometimes volatile future.  In order to protect your finances, more coverage than the minimum may be needed to protect from possible financial instability. It is common to have up to one million dollars in coverage in order to ensure protection from catastrophes such a multiple car collisions.  This protection comes with higher premiums but can be considered essential for those who would rather be safe than sorry.

The More the Better

There is a sufficient risk that the cost of damages from a car accident will be well-beyond your means to cover them.  You should obtain as much insurance as possible in order to give yourself the most assurance that you are properly protected.

If the minimum coverage is well within your financial reach, you may consider protecting yourself with more coverage. Paying slightly more each month in order to prevent one huge loss from an accident can be a wise idea. In both the United States and Canada, the minimum coverage requirements are chosen with consideration of the customer and their financial position.
blog comments powered by Disqus