Monday, July 7, 2008

Are You Covering Your Car With A Toga? By Dan Kalm

Today's economy continues to cause people to look for areas to save money. A person looking for ways to save money may make a decision to save a couple of dollars that later may cost them much more.

In auto insurance, the state of Arizona mandates that drivers carry minimum limits of 15/30/10. This means the most the insurance company will pay when you are at fault for a single injured person is $15,000 and if multiple people are injured, $30,000. The final $10,000 indicates the maximum amount that an insurer will pay for damage to another person's property, for example, vehicle damage. When you consider emergency room bills and ongoing treatment or even funeral expenses, $15,000 may not be enough. Also, according to the National Automobile Dealers Association, the average price of a new car sold in the United States is $28,400. If a driver with minimum limits totals or severely damages another vehicle, $10,000 limits could leave an at fault driver owing the difference between what the insurance coverage will pay and the total cost of repair or replacement.

A short insurance review and answering some basic questions will help you choose the best auto coverage for your current situation. First, what assets (home, bank accounts, personal property or other belongings) do you need to protect? Secondly, many people do not realize that injured parties can sue for unpaid damages and wages in Arizona can be subject to garnishment for unpaid judgments. So, in addition to potentially losing your property and belongings, you may also have to give up a percentage of your wages to cover the amount that your available insurance did not pay. Not only could you lose all that you worked so hard to achieve, but your future earnings would also be affected.

As your life changes, your insurance coverage should change with you; an annual review of your policy with your insurance agent or company is a vital part of your financial future. So dust off your insurance paperwork today and make sure your coverage makes sense for your personal situation. As I tell my clients, "If a one size fits all approach to life made sense, we'd all be wearing togas."

(To reach Dan, call (520) 795-0231 or go online to

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