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Why Should I Have More Than Minimum Insurance Coverage?

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By Christopher Coble, Esq. on May 05, 2015 1:02 PM

Every state requires all drivers to carry auto insurance. And Obamacare now requires everyone to have health insurance. Facing these laws, many people's first thought is to get the absolute minimum insurance required, in order to save money.

While this may seem like the most fiscally responsible move in the short term, not having more than the minimum insurance coverage could end up costing you later.

Covering More Than Your Car

While terminology and penalties may vary, every state has laws requiring a minimum amount of auto insurance coverage. And of the many different types of coverage available, many of us choose the minimum.

But basic collision coverage may only cover that -- collisions -- paying just the cost to cover the damage to your vehicle in a car crash. This could leave you on the hook for any personal injuries or property damage from an accident or damage to the car from theft, fire, vandalism, or other random destructive acts like falling tree branches.

There are car insurance policies that will cover all of that and even some that will cover damages from uninsured or underinsured motorists and hit-and-run accidents. While these policies may be more expensive up front, they may come in handy later.

Harboring Your Health

We've all been there: presented with 3 (or more) health insurance coverage options, trying to figure out how many prescriptions we may need, or if your dentist is included in the plan. Balancing costs and the likelihood that you'll need medical attention in the future is a difficult calculus and the threat of fines for not having insurance doesn't make the decision-making any easier.

Choosing a healthcare plan can seem impossible, but here are a few considerations, according to HealthCare.gov:

  • Your income, and total family income;
  • Your overall health, and the health of your family; and
  • Your average yearly doctor visits, along with prescriptions.

Deciding the amount of insurance coverage that is right for you is a personal decision. But you may want to consult with an experienced insurance attorney if you are faced with a lawsuit or claim based on your insurance.

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