Using an Auto Insurance Calculator

An auto insurance calculator is a tool designed to help you determine how much coverage you need to purchase and ultimately helping you in getting the cheapest car insurance quote in the end. When you buy auto insurance, each policy provision contains upper limits or maximums. For example, if your liability coverage has a $50,000/$100,000 coverage limit, this means that your insurer will pay a maximum of $50,000 to each individual injured in an accident you cause. They will pay a total of $100,000 for an incident.

So, for example, if you have an accident and cause $60,000 of damage to one individual and $20,000 of damage to another, your insurer will pay $50,000 in damage to the first individual, and $20,000 in damage to the other. You will be responsible for paying the remaining $10,000 to the first individual. Likewise, if you have an accident and cause $60,000 of damage to two separate individuals, your insurance will pay each of those victims $50,000 and you will have to come up with the remaining $10,000 for each, leaving you with a $20,000 out-of-pocket cost.

Using an Auto Insurance Calculator to Determine Coverage Limits

As you can see, if your coverage limits are too low, you can find yourself facing serious financial difficulties when you are forced to pay damages if you cause a great deal of injury or property damage. Since insurance is designed to protect you from financial ruin in the event of an accident, it is a good idea to use an auto insurance calculator to determine exactly how much coverage you need to buy and what the upper limits of your coverage should be.

Numerous websites make an auto insurance calculator available in order to help you determine your coverage needs. For example, at Car Insurance.com, their coverage calculator asks you to input information about your marital status, your children, and your status as a renter or home owner and the result is a new car insurance quote. You will also be asked whether you have passengers in your vehicle that don’t have health insurance, what your annual income is, how many assets you have (including bank accounts, stocks and bonds, among others), and your expected net worth when you retire. In addition, you will answer specific questions about your car and driving habits, such as whether you drive in areas where deer or wild animals are, or whether your car is owned or leased. After you have finished filling out the questionnaire, the website will provide you with detailed information on the amount of coverage recommended in each of several policy areas.

This online coverage calculator, as well as similar calculators at numerous websites, should be used to determine how much risk you can take on but it is a matter of greater understanding that how much insurance do you need, and how much coverage you should buy to fully protect yourself. If you aren’t comfortable using an online auto insurance calculator to make these determinations, a licensed insurance agent or your insurance company representative can also help you to access your risk and determine if you are fully protected.

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