Coverage Checklist

Private passenger automobile insurance is in many instances required by state financial responsibility, compulsory insurance, no-fault, or uninsured motorist laws or by the provisions of a car loan agreement or an automobile lease. Still, most individuals who own or hire cars obtain automobile insurance voluntarily and are willing to consider optional coverages and higher limits of liability if the need for them is clearly shown.

Usually, the need for optional coverages can be shown merely by revealing that the client has a particular exposure to loss not covered under the policy. Because the possible severity of auto loss exposures ranges widely, there is no set rule on when an optional coverage should be purchased. An uninsured physical damage loss, say to a collection of compact disks, may be insignificant to the client's financial well-being, and so the client may choose not to buy insurance for that exposure. But an uninsured liability exposure, like a minor child's moped that the client has not thought to insure, leaves the client open to damages that could far exceed his total wealth.