How Car Insurance Do I Need?

Today, we’re going to be talking about how much car insurance you need to buy. In general, you need enough car insurance to satisfy your state’s minimum coverage requirements and adequately protect your finances if your car is damaged or you’re in an accident. There are three steps that you can take to determine exactly how much car insurance you need.

First, you need to find out your state’s minimum coverage requirements. Almost every state requires drivers to have liability insurance, which pays for property damage and injuries that you cause to others. But some states also require drivers to carry additional types of insurance, like personal injury protection or uninsured motorist coverage. Even if a certain type of coverage isn’t required, you should still consider purchasing it for additional protection if your budget allows.

Next, decide whether or not you need collision and comprehensive insurance. If your car is leased or financed, your lender or lessor will likely require you to have both. But if you own your car outright, you can consider passing on collision and comprehensive coverage if the cost is greater than 10% of your car’s value, minus your deductible. However, this is just a general rule of thumb, and you also need to consider if you’re in the financial position to pay out-of-pocket to repair or replace your vehicle. 

Finally, you should calculate how much liability insurance you need. States that require liability insurance set minimum coverage limits for bodily injury and property damage coverage. But these limits are usually very low, and may not be enough to cover all of your expenses if you cause an accident. And if the other driver sues you, then your wages and assets could be seized to cover what your insurance doesn’t. As a result, you should try to get enough liability insurance to cover the value of your assets. Now that you know how much car insurance you need, it’s time to start looking for coverage. I hope you enjoyed this session on everything you need to know about How Car Insurance Do I Need? So always be sure to contact a professional before making any financial decisions.