DO YOU HAVE THE RIGHT INSURANCE COVERAGE  – LAWYER’S VIEW

What insurance should you have and how much do you need? Our lawyers deal with insurance issues all day every day, so we have some opinions. Of course, most people need the basis: auto, home and life. But how much insurance coverage do you need and are there other kinds you should have? The answer depends on several factors. For example, how old are you? Are you married with children? What assets do you have to protect? Where do you live? Here are some things to consider when reviewing your insurance coverage:

AUTO INSURANCE IS REQUIRED

Car insurance is pretty obvious. Most states, including Minnesota, require every car to have insurance. However, the law doesn’t tell you how much car insurance to get. In Minnesota, the minimum requirment is $30,000 of liability coverage. But that is really doesn’t make sense for almost anyone. In most situations, we recommend a minimum of $100,000 liability coverage but suggest $250,000 is better. One reason to get more car insurance is that your underinsured and uninsured coverage will be the same as your liability coverage. In other words you are no just protecting yourself from being sued, you are also protecting yourself if you are injured.

Another thing to consider with car insurance is the amount of property damage coverage. We have seen many cars with only $10,000 of property damage coverage. It doesn’t take much to have more than $10,000 of damage from a crash. We recommend at least $25,000, but $100,000 is better in case you are in a multi-vehicle crash. At least look at the pricing for increased coverage. You will see that getting more insurance is not that expensive.

HOMEOWNERS INSURANCE

Homeowners insurance covers you for damage to your house. However, homeowners policies can have very different exclusions. For example, many policies exclude vermin. If a squirell gets in your house, it can cause a lot of damage. But your homeowners policy can exclude coverage for this. That is just one of many exclusions that can be in a homeowners policy. We suggest you read your policy carefully to see what is included and excluded from coverage.

Another important use of homeowners insurance is liability coverage. Homeowners insurance will cover you if someone is injured at your house. Most policies also cover you if your dog bites or injures someone. However, most people don’t know that homeowners also covers you for injuries to other people away from your property. For example, if your dog injures someone at a dog park. Again, READ YOUR POLICY to see what is covered and what is excluded. You can switch insurance companies to get the coverage you want.

OTHER INSURANCE TO PROTECT YOURSELF AND YOUR FAMILY

Medical insurance should also be obvious. Most people get medical or health insurance through their employer or the government. We recommend everybody have medical insurance. Also, take advantage of a HSA if possible. Any money you don’t spend from your HSA can be saved and invested for the future. If is a great savings tool.

Life insurance and disability insurance are also important. Life insurance is usually inexpensive while disability insurance is more expensive. That is because you are must more likely to need disability insurance. We recommend term life insurance. The amount you should get really depends on your family situation. The imortant thing is that you think about it. We also recommend disability insurance to replace at least 70% of your income if you become injured or sick and can’t work. However, that also depends on your age, amount of savings, and family situation. At least think about it.

Finally, if you already have the other insurances, consider an umbrella policy. This is very inexpensive insurance and is great to have for a freak accident. Also, you can get an umbrella policy that provides additional auto uninsured and underinsured coverage. Again, it is not expensive because you are not likely to need it. However, our lawyers see cases every day where the unthinkable happens and the extra coverage is greatly appreciated.

We hope the biggest take-a-way from this post is that you at least think about your insurance coverage once a year. Hopefully you will never need it. But it brings peace of mind to know you are protected in case of a terrible situation.