What You Should Know About Auto Insurance
- Why buy auto insurance?
You buy auto insurance to protect yourself, your family and your assets. Auto insurance policies include several types of protection. The liability portion of auto insurance pays for injuries or damages you cause, including to passengers in your car. Other coverages pay for damages to your car and to protect you in case you have an accident with someone who has no insurance or too little insurance. Nearly all policies also require the insurance company to defend you if a claim is made against you.
- Must you buy auto insurance?
In Wisconsin, you are not required to buy liability insurance. However, our financial responsibility law requires licensed drivers to have insurance or enough money to pay for damages they cause. If you cause an accident and cannot pay for the damages, your driver’s license can be suspended. You are then required to pay the damages and buy insurance before your license is reinstated.
If you buy insurance, the minimum insurance coverage required is $25,000 for injury or death of one person in any one accident, $50,000 for injury or death of two or more persons in any one accident, and $10,000 for property damage in any one accident. Uninsured motorist coverage is also required at the same limits. Underinsured motorist coverage must be offered to you in the minimum amount of $50,000 per person and $100,000 per accident.
- What’s the “right” amount of insurance?
The minimum amount of coverage may not be sufficient to cover damages caused in an accident or to protect your assets. The “right” amount of insurance depends on the level of your personal assets that require protection. In most cases, you should buy the highest level of coverage you can comfortably afford. Compare premiums for different levels of coverage. Rates for higher levels are not that much greater than lower levels of coverage.
Because serious injuries can result in high medical bills and other costs, you need adequate coverage. You could be held responsible for expenses in excess of your liability insurance coverage. If you have substantial assets, you should consider purchasing an umbrella policy.