"What’s The Relationship Between Increasing Coverage And Annual Premium?"
While the obvious relationship is “the higher the coverage the higher the premium”, this needs to be put into perspective. The example below illustrates a base policy with 2 additional options, both of which increase coverage pretty substantially. The annual premiums are shown for each scenario, as well as the cost differential for increased coverages as they relate to the base coverage:
Minimum liability coverage is mandated by the state of California and those limits are $15,000 per person and $30,000 per accident. The cost for a substantial increase in coverage is minimal when considering the protection it provides. What’s important here is to determine your appropriate amount of coverage, which begins with you knowing your personal net worth…That would be the maximum amount you could lose in a lawsuit, as the result of negligence on the part of the insured.