We will now discuss optional coverages available under Pennsylvania auto insurance law.

First, let’s talk about comprehensive coverage and collision converge. They are optional under the law, but may not be optional if you have financed or leased your vehicle. If you have financed or leased, then you must choose the amount of deductible.

Think of a deductible as sharing the risk. The higher the deductible, the lower your premium. You can choose no deductible or a $2,000 deductible. If you had a claim, how much cash could you come up with to repair your vehicle? If you feel you are a safe driver, how much risk are you willing to take?

Remember, not all drivers are safe drivers and have adequate insurance. Then contact your insurance agent and ask how much you will save if you choose a higher deductible.

If you pay off your car, when do you decide not to carry comprehensive and collision coverage? My office advises our customers to consider not carrying collision coverage when the value of your vehicle goes below $2,000. Our rationale is most people have a $500 deductible. The average premium for collision coverage is $250 per year. The average person has a collision claim every 18 years.

If your car is wrecked, your insurance company owes you $2,000 minus your $500 deductible – so you get $1,500. The cost for collision coverage is $250 per year. If you multiply $250 by years the average person goes before having a claim (18), you will have paid $4,500 to protect $1,500. This thought process also applies to comprehensive coverage.

The next optional coverage in Pennsylvania is coverage Q, or extraordinary medical coverage. It pays for medical bills, rehabilitation, medical equipment and skilled care resulting from an auto accident regardless of fault. It provides coverage up to $1 million and costs an average of $28 per year. Every person should have this coverage.

In Pennsylvania, you can purchase loss-of-income coverage. This coverage can be purchased providing $1,000 per month of income up to $2,500 per month. In past articles, I have explained the importance of disability insurance. If you do not have adequate disability insurance, you may want to add this to your policy.

Most insurance policies in the state also offer rental and emergency road service coverage. Our experience is no matter how many cars you own, purchase rental coverage with the highest limit. Accidents happen when people travel, cars are not repaired quickly and most people have a need for all of their vehicles. As for emergency road service, ask what it provides and costs, then make your decision.

The last two optional coverages in Pennsylvania are uninsured motor vehicle coverage and underinsured motor vehicle coverage. They enable you to collect for pain and suffering from your own insurance company, if the accident you are involved in was caused by an uninsured or underinsured driver.

I will repeat the advice I give to my customers: your first exposure is liability. Protect your assets and be morally responsible. Make sure your medical bills and loss of income are covered.

When choosing deductibles, think about your ability to pay at claim time. As your vehicle gets older, check its value and compare the cost of covering it.

Bob Hollick is a State Farm Insurance agent based in Washington.

To submit columns on financial planning, investing or business-related matters, email Rick Shrum at rshrum@observer-reporter.com.

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