Personal Finance Concepts Essay Example | Topics and Well Written Essays - 1000 words

Personal Finance Concepts - Essay Example As the report declares a single liability limit on the other hand would not subdivide the coverage that may be claimed in this manner. It will merely specify a total amount that may be claimed towards all the various categories of damages that may occur, including both bodily damage and property damage. The insured amount can be applied towards any category of expense, however the insurer will not pay for a total amount more than that specified. This paper discusses that the amount of personal liability coverage on my policy is not adequate to protect all assets and future income. This is only a token amount that has been allotted since PIP is no longer considered mandatory in most states. It will cover only a few of the incidental expenses that are liable to arise out of an accident. Also, my car is seven years old, yet collision or property damage coverage is required, although the insurance companies pay for damages according to the book value of the car. The amount of deductible will determine the premium and every time a claim is made, the premium increases, so it is worth considering a higher deductible in order to avoid claims. In the case of an older car, it may be less worthwhile paying higher premiums that are good to protect against damages to a brand new car but not in the case of a car that is over seven years old, as in this case. Uninsured motorists coverage is mandatory in most states that require auto liabil ity insurance, in order to allow for expenses that an auto owner may incur through the fault of an uninsured motorist.