Why now is the time to review your auto insurance policy

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In 2019, auto insurance rates are expected to rise, making this the fourth straight year of rate increases.

Why? Auto insurers have reported revenue losses due to an increase in vehicle accidents and natural disasters, as well as higher car prices.

Before your auto insurance policy renews in January, review your policy to make sure you have the right coverage for you and your family. Here are a few things to make sure you have and a few you can let go of.

Auto insurance essentials

Medical payments coverage: Medical payments coverage, aka "Med Pay," covers your medical expenses when you're hurt in an accident, regardless of fault.

Depending on your policy, Med Pay can also help pay for funeral expenses, injuries sustained by passengers or injuries sustained as a cyclist or pedestrian.

For a few dollars a month, Med Pay protects you against exorbitant medical bills. Even if you have excellent health insurance with little to no deducible, Med Pay is a good thing to have. If you have a high-deductible health plan, adding at least $10,000 in Med Pay coverage is essential.

Uninsured/uninsured motorist coverage: If an underinsured driver hits you, and that driver only has California's required minimum coverage, they likely won't have enough insurance to cover your medical bills and pain and suffering. That's when you need uninsured/underinsured motorist coverage.

UM/UIM covers the difference between the negligent driver's low insurance and the extent of your damages. The maximum UM/UIM coverage you can purchase is whatever your liability limits are so always purchase UM/UIM coverage that is the same amount as your liability coverage.

In fact, the ability to purchase more UM/UIM coverage is the main reason for you to raise your liability coverage; otherwise, you're protecting others more than you're protecting yourself.

Liability

You'll need at least the minimum required under California law. That includes:

· Bodily Injury Liability Coverage: $15,000 per person / $30,000 per accident.

• Property Damage Liability Coverage: $5,000.

You generally don't need to change liability coverage often. However, if you have at or near the minimum coverage, but you have personal assets that well exceed those numbers, consider increasing liability coverage.

Why? If you cause a serious accident that escalates to a lawsuit, and you don't have much insurance, your personal assets could be at risk.

Auto insurance coverage to reconsider

Collision: Generally speaking, if your car is more than 8 years old, and it's not a luxury vehicle, you may not need collision coverage. Collision coverage covers repairs to your vehicle if you're at fault in an accident or if the adverse driver is uninsured.

If your car is only worth $2,500, for example, you're better off paying for repairs out of pocket than spending $100 a month for collision.

Perks: Extras such as roadside assistance, towing, car rental and accident forgiveness are nice to have in theory, but have you used them in the past couple years?

If you're a safe driver with a clean driving record, you may consider letting go of accident forgiveness. If your car is relatively new and reliable, you may not need towing or roadside assistance. Talk to you agent about the cost of these extras.

Discounts: Are you receiving all available discounts? Check your renewal statement to find out what discounts you're receiving and talk to your agent to find out what other discounts are available.

For example, State Farm offers a "Drive Safe and Save" discount that increases the less you drive. Other discounts to research include:

• Community and athletic club members

• Credit union members

• Loyalty discounts

• Financial stability discounts (for drivers with high credit scores)

• Multi-car discounts

• Multi-policy discounts (home, renter's, earthquake, RV, vacation home, boat insurance, separate auto policies in the same family, etc.)

As we enter the final month of 2018, review your policy to make sure you're getting the most out of your auto insurance.

If you have policy questions because of an auto accident, contact an experienced personal injury lawyerfor answers and a free consultation.

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David G. Smith, Attorney At Law
2201 Broadway
Penthouse 1
Oakland, CA 94612

Phone: 510-431-2598
Fax: 510-893-2701
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