Your car insurance coverage limit is the highest amount your policy will pay following a covered loss. The higher your auto insurance policy limits, the more your insurer will pay. Once you reach the limit, you’re responsible for paying any additional expenses out of pocket.
If you’ve been involved in a crash before, you will understand how quickly the cost of repairing your car can add up. Therefore, you need to understand your auto insurance coverage limits to ensure you are satisfied with your chosen limits.
How Do My Limits Impact My Rate?
Typically, reducing your limits will reduce your premium, while increasing the limits will increase your premium. Regarding your deductible, the higher your deductible, the lower your auto insurance premium will be. Because when your insurance deductible is higher, you retain more risk. While you may not want to reduce your limits, you need to consider your finances and know what you can afford should you involve in an accident.
How Often Should You Review Your Coverage Limits?
Life is constantly changing. It’s best to review your insurance limit every year to ensure you are satisfied with the amount of risk you are ready to bear. Increasing your insurance coverage limits will increase your premium, but the amount you add is minimal compared to the amount you will save when involved in an accident.