There are many factors that customers consider when purchasing car insurance. Aside from things like the age of the car you drive and the amount of miles you put on it, one factor that many people fail to account for is the kind of car their neighbors drive. Very few motorists take the cars that drive around their community into account when choosing an auto insurance policy because, at first glance, it doesn't make much sense to consider other cars.
However, according to U.S. News & World Report, if your neighbors all have high-end luxury vehicles and you happen to crash into one, or otherwise cause an accident, simply having property damage liability coverage might not be enough to pay for the full costs of the car repairs. Some states require all motorists to have underinsured motorists coverage, but not all. In the event the person you hit does not have this additional coverage, you could get sued to pay for the damages. This could very likely put your assets, such as your car or home, at risk if you are unable to afford the repair costs.
To avoid finding yourself in a situation like this, make sure you have adequate coverage by buying higher liability limits. This will ensure you're properly insured in case you cause an accident on a high-value automobile. According to the source, Robert Hoyt, the Dudley L. Moore Jr. chair of insurance at the University of Georgia, said not having adequate insurance coverage can be a huge drain on your finances if you cannot pay for damages.
"Bare bones insurance can put their assets at risk when they cause an accident," Hoyt said. "[Consider] being on the hook financially for thousands of dollars in medical and car repair bills with not enough insurance to help pay for them."
While you might not like the fact that you should have additional insurance coverage just because other people have nicer cars, upgrading your policy can potentially save you tons of money in the long run.
CoverHound provides auto insurance options from their easy-to-use website.