Spare Your Budget or Their Budget? Whether or Not to Lower Your Coverage

If you want to ensure you have adequate auto insurance Los Angeles can be a tricky place. The amount of traffic, the tendency for many people to speed, and the long distances you have to cover to get anywhere mean you need a lot of insurance. But that also means you end up with high monthly premiums. One tactic for dealing with high premium costs is to reduce the coverage limits you have. Going down to the bare minimum isn’t advised, but reducing six-figure limits to five figures could be a way to keep costs in check. Here’s how to determine if reducing some of your coverage is a good path to take.

Your Ability to Pay

Your ability to pay your insurance premiums comes first; some insurance coverage is better than none. But that isn’t as obvious a factor as you’d think. Look at the rest of your budget and see if there are other things you can cut; if so, you may want to cut those instead because the insurance is meant to save you in an emergency. But if you can’t cut anything else, then yes, lowering coverage limits would be necessary.

Your Assets

If you cause an accident that results in damages exceeding the coverage your policy would offer, the other party can sue you to get additional reimbursements so they don’t have to eat the cost of repairs you made them get. If you have a personal estate that would be at stake, you need coverage. You don’t have to be rich to have enough personal assets to make a court case painful. If you have very little, though, then you’re not at risk of losing as much in court. Cutting coverage to lower your premiums could be OK.

Your Driving Habits

Any time you’re on the road, you risk an accident. But the less you’re on the road, and the more careful you are, the less your chance of something happening. If you are cautious, don’t drive that much, and don’t drive long distances that often, reducing the coverage could work out. But if you have a tendency to drive fast, late at night, or under other riskier circumstances, keep the higher coverage if you can afford it.

When you sit down to re-evaluate your auto insurance Los Angeles’ driving culture and your habits do need to be part of the conversation. Your insurance agent can walk you through all these considerations and help you reach a fair decision that spares your budget while still offering adequate coverage.