How much car insurance do I need?

Question

Hi all! I wasn't sure where to post this question. For car insurance, my agent is telling me that I need a certain level of coverage. According to the agent my main concern shouldn't be the car but rather the damage that I can cause to others in an accident that's my fault and that this could/would expose my assets (I do own several properties). I would love some feedback on this! Thanks!

John Mocker · Answer

Patricia,

I generally recommend high coverage for Liability on Auto Insurance policies.  First, for property damage you cause, if the car is  new car or you damage multiple cars, the costs could easily be $50,000 - $100,000.  With Bodily Injury, there is no limit on what a Jury can award.  Without knowing more about your situation, I would think you would want limits of $300,000 to $500,000 backed with a an Umbrella policy (those policies are generally issued in $1,000,000 increments).  The Umbrella will also cover over your Homeowners Liability and may also cover over your rental properties.

Remember, if you buy low limits (like the state minimums) you will be responsible for the costs that exceed those limits

Chris Seveney · Answer

@Patricia T.

There are state minimums typically for liability insurance. Yes you want it. Typically we get state minimum.

Cameron Moore · Answer

In this market (And the fact that you are located in LA where every other car is a flashy car), I suggest the highest limit possible. The price difference is very very small. If you want to lower your premium drastically, Raise your deductibles. But ALWAYS have high liability coverages.

William Joel Idleman · Answer

@John Mocker is right.  Think about how much a new truck is off the lot now.  $50k minimum.  The state minimums may not suffice in cases of serious bodily injury or property damage.  I recommend finding an insurance broker in your area.  A captive agent is one who can only write insurance for their company specifically.  For example, a State Farm agent can only use State Farm.  This is starting to change a little.  Some captive agents are able to shop a few other companies now.  I've always found the best value in a insurance broker because they are able to shop more insurance companies and provide multiple solutions.

Julie Prewitt · Answer

Hi Patricia -

I am with NREIG. We are an agency, not the insurer. We've built a insurance program that is backed by a number of different insurance carriers/companies which allows us to place coverage for our clients on the carrier policy within our program that is the best fit from a coverage and cost perspective. In the program, we only insure residential investment properties (up to 20 units), but also have a commercial agency for properties that are not a fit for the program. I will note, given the subject line of this thread, that we do not do auto. Feel free to DM me if you have any other questions about NREIG!

John Mocker · Answer

Patricia,

There are three main ways you can purchase Property Insurance coverage:

1. Independent Insurance Agent (aka broker) - The Agent represents multiple companies and can provide quotes from them.

2. Captive Agent - that agent represents only one Company (ie. Allstate, State Farm, ...) and normally can not write coverage with other companies (that is changing somewhat recently)

3. Direct - some companies only work directly.  Some companies like GEICO (for auto Insurance) do not work thru agents and you have to either work through their 800 number or website

I do not know how NREIG works but I suspect they are a Direct Company.

I am Agent with an Independent Agency so my preference is naturally that form of Insurance distribution.  We write with over 100 Insurance Companies and programs.  The ability to pick and choose what carrier is best for a property or business is an advantage.  Also, having other markets internally to approach if the renewal rates go up is also beneficial.

Patricia T. · Answer

Thank you all for your feedback!

@John Mocker What's the difference between an insurance broker and the insurance company BP lists under the "Network" tab(National Real Estate Insurance Group)?

Anyone have experience with NREIG?

How much car insurance do I need?

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