Harry Gross: Does it make sense to pay minimum in car insurance?

Posted: October 26, 2012

DEAR HARRY: I own my home free of mortgages. I was going over my financial situation, and I came up with some money-saving ideas. One is to cut my auto insurance down to the state minimum. My car is a 2004 Mazda with 120,000 miles on it. The car is still in great shape, both mechanically and in appearance. I have never had a major accident. What's your take on this? My policy comes up for renewal in three weeks.

WHAT HARRY SAYS: Let's start by looking at those minimums. The liability minimums are $15,000 per person, $30,000 per accident, and $5,000 for property damage. They are set for those who have no substantial assets. That does not include you. You own a home, and I'm virtually certain other assets could easily be in jeopardy if you had a serious accident. Just because you're a good driver is no assurance that you'll be protected. May I suggest that you go for liability protection of $100,000 per individual, $300,000 per accident, and $25,000 for property? Never forget that insurance not only protects assets, but gives you peace of mind. You also might want to consider an "umbrella policy." This will give you added protection beyond the limits of your auto and homeowner's policies. It's not too costly, either.


Write Harry Gross at the Daily News, 801 Market St., Philadelphia, PA 19107.

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