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Insurance Corner: Make sure you have the right insurance coverage

When I first started this column I wanted it to be informative. I do not know if I have accomplished that, but let me pass along two recent inquiries that might benefit someone out there.

One customer recently came to me for a quote on auto insurance. They had their home insured with an agency company, but purchased their auto policy from an auto direct writer. I asked to look at both policies so I could accurately assess the risk.

Their home is insured for and worth $500,000. The liability limits on their two vehicles was $30,000/$60,000. I asked them what would happen if they were negligent in an auto accident resulting in significant injury to the other party. Not getting an answer, I explained that if the damages or judgment for the other party in the accident were above their liability limits, their auto insurer would tender the limits and walk away. Their assets would then be at risk for the remainder of the damages.

It really does not take much in medical cost to exceed $30,000 per person. By increasing their liability limits to $250,000 per person, $500,000 per occurrence, their premium went up by $125 per year for both vehicles. An umbrella liability policy for another $1 million is available for another $169 per year. They did not save money on insurance, but they got the protection they needed.

Another customer looking for a quote on auto and home insurance had $100,000/$300,000 liability limits on their car and $1 million liability on their home. Going through some scenarios we concluded that there was a greater risk for liability on the car than the home.

They needed to lower the liability limit on the home to $300,000 and buy an umbrella liability policy over the car and home with a $1 million limit. This would cost a little more than what they would pay if we matched what they had, but would give them better protection.

Many times the lowest cost is not the right answer for many people. You have to be cognizant of your assets and make sure you have insurance coverage to protect those assets.

Most people shop price. That is okay if you have the right coverage. First, you need to get the coverage correct then shop price. If you do not understand what you may need you are better off having a licensed agent review your personal situation, make recommendations on coverage, then you can make a decision whether to buy insurance from that agent or take his recommendations and shop price. Remember, you as the customer always have the final say in what and from whom you buy insurance coverage.

Dave Pushman is the former regional vice president of Geico in Macon and is now an independent insurance agent with Tidwell and Hilburn Insurance. He can be reached at davep@th-ins.com.

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