In Colorado, drivers must have liability coverage at the following minimums: $25,000 per person for bodily injury, $50,000 per accident for bodily injury, $15,000 per accident for property damage.
Car Insurance Basics
When car insurance is mentioned, we think about the basic liability insurance States require us to purchase for our vehicles. We know we can add comprehensive coverage that will help cover expenses for damage in an accident. Typically this is applied to newer vehicles. There are several other types of insurance that can be purchased for your car, both of which have upsides and downfalls.
Extended Warranty Car Insurance
Extended Warranties that can be purchased along with your car equivalent to health insurance for your car. The challenge with many warranties out there is that they cover too little and cost way too much. You would never pay full price for health insurance if it only covered a few body parts, but might consider that same insurance if it was relatively inexpensive. The same applies to extended warranties: it depends both on what is being covered and for what price whether purchasing it is a good idea.
Auto Gap Insurance
Gap Insurance is a good idea only if you are financing 85% or more of the purchase of a new car. This insurance was created because new cars depreciate so much quicker than the loan is paid down for a period after the car is bought. If the car is damaged beyond repair during this period, insurance will only cover what the car is worth, meaning that the owner would still owe the amount left on the loan. With Gap Insurance, the “gap” between what the car was worth and the remaining amount on the loan would be wiped out or credited towards the purchase of another vehicle.
Credit Insurance is similar to expensive life insurance that pays off some or the entire remaining loan in the case of death or disability. Credit insurance is rarely a worthwhile purchase; it is almost always less expensive to purchase life insurance or disability insurance instead.
Umbrella Insurance Policy
Umbrella policies are almost always a good idea to purchase. This style policy works with both your existing car insurance and your home owners or renters insurance to provide additional liability coverage. These policies are usually inexpensive and are a great protection against unexpected problems, like slips and falls on your property, a tree from your yard falling on your neighbor’s, or other expenses that extend beyond your current liability insurance coverage.