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Buying auto insurance is important business that many take the chance of ignoring. A useful
extension to the thinking process in this area would be to understand that if a vehicle registered to you creates a liability
to you. Even if it is a vehicle that no longer operates under it's own power. For example, if a non-running vehicle on
your property is somehow pushed into the roadway and hits another vehicle or person, you as the owner, will be liable for
the damages and or doctor's bill whether you were at home or not. Another important
consideration is net worth. Most states have a minimum amount of coverage to carry. Many want to opt for those minimum limits
of coverage because of the price but the minimum is set for the poorer of the community. As an example, if you are liable
for injury to another in an accident and the damages are more than the limits of your policy you can still be ordered to pay
the amount over your policy limits. If you have discoverable liquid assets, they can be at risk. The sky is not the limit
on the amount you should carry. I advise that if your net worth does not warrant retaining an accountant then purchase three
times the bodily injury limits and twice the property damage limits.
The style or makeup of your house
hold may create a confusion as to what responsibility belongs to whom. The basic rule is that if the vehicle is garaged
at your home then the responsibility is yours. This can create an additional problem due to the reliability of a household
member and their driving record. If this household member has a good driving record, it would be beneficial to add them
and their vehicle because the premium would be credited all discounts of the policy but that gives them no prior insurance
credit in most cases. Once they applied for coverage on their own, the credit of prior insurance would not apply and
the premium will be at least 25 per cent higher for them. On the other hand, if they have a bad driving record the overall
premium for the head of household will increase. Even though it would be more cost effective for that member to purchase
their coverage seperately, the responsibility still lies with the head of household for damages that vehicle causes.
In some jurisdictions a non-running vehicle may require coverage to prevent being towed away by the
city at a fee charged to the head of household.
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