7 foolish insurance moves: Car insurance
7 ways you're being foolish with insurance
You can easily do something ridiculous when you buy car insurance. One way is to purchase only the minimum liability coverage required by law and think that that would offer enough financial protection if you cause injuries in an accident, says Ron Moore, senior product manager for MetLife Auto & Home in Minneapolis.
The liability minimums would barely cover a day in the hospital if you hurt two people in a car crash, says Tim Dodge, director of research for the Independent Insurance Agents & Brokers of New York in Syracuse. And if your coverage is lacking, a very serious crash could wipe you out.
"You need to have enough liability to protect your savings and your future earnings, because you could end up declaring bankruptcy or having your wages garnished," Dodge says. "Higher levels of liability coverage don't cost as much as you would think, either. Each additional layer of protection costs proportionately less."