How Much Car Insurance Do I Need? A Guide to Choosing the Right Coverage
How much car insurance do I need? This is a common question among car owners who are trying to understand the various types of car insurance and liability limits. This guide will help you answer the important "How much car insurance coverage do I need?" question and provide key information on personal injury protection, collision coverage, comprehensive coverage, and more to protect you in the event of an accident or lawsuit.
Understanding Car Insurance Basics
Most states require all drivers to have a minimum amount of car insurance. This protects you and others in the wake of a serious issue, such as a car accident. It can cover everything from vehicle repairs to medical expenses. Insurance agents can provide quotes for an auto insurance policy that meets your driving needs.
Assessing Liability Coverage
Liability coverage, which pays others when you are at fault in an accident, is required by most states. While it will cover medical bills and property damage, it will not pay for any damage to your vehicle.
Liability insurance consists of:
- Bodily injury coverage: This component of liability insurance, much like it sounds, will cover the costs of medical expenses and lost wages in the case of physical injury. Medical payments coverage can save you significant time and money.
- Property damage coverage: If you damage another driver's car in an accident or damage property, such as a home or fence, your property damage coverage will kick in. If you're wondering "How much property damage car insurance do I need?" the answer depends on where you live. State minimums range from $5,000 to $25,000.
- Reviewing state minimum requirements: It is essential to review your state's minimum requirements to ensure your car insurance is adequate. In most cases, going beyond minimum coverage is a good idea to pay for additional costs — such as car repair bills and a rental — in the wake of a serious issue or accident.
The answer to "How much liability insurance do I need?" will vary based on your location and driving needs.
Evaluating Collision and Comprehensive Coverage
Comprehensive and collision insurance go a step beyond liability coverage.
If you are in a car accident, collision insurance will pay for the repairs to your vehicle. Conversely, comprehensive insurance is designed for issues outside of accidents, such as weather-related damage, theft, or vandalism.
While comprehensive coverage is typically advised for most drivers, there are a few situations where you might consider dropping it. If you have a high deductible and your car's value is low, you might pay for repairs out of pocket anyway. If you are comfortable paying for potential damages, this is an option to reduce your car insurance premium.
Generally, the more car insurance you have, the better. Collision and comprehensive coverage can save you a lot of money in the long run.
Personal Injury Protection (PIP) and Medical Payments
Personal injury protection (PIP), also known as "no-fault" car insurance, covers the cost of medical expenses related to a car accident, regardless of who was at fault. It will cover both you and any passengers.
Factors Influencing Your Insurance Needs
Your insurance needs can vary throughout your driving lifetime. Several key factors will influence your insurance needs, such as:
Driving habits: If you only drive a couple of times a month, your insurance needs will be different than if you drive hundreds of miles daily. Likewise, if you drive in an urban area with more accidents and more cases of theft, you will also need more insurance than if you drive in a quiet rural area.
State-specific requirements: Every state has its own car insurance policies and minimum requirements. Make sure you know what is required where you live. And if you are preparing for a move or travel, contact your insurance company ahead of time to prepare for any required updates.
Your driving record can also impact your insurance needs. If you have a history of incidents and accidents, you will likely want to up your overall coverage.
You may also want to look into accident forgiveness insurance as well as uninsured motorist coverage and underinsured motorist coverage to round out your auto insurance policy. You can use a car insurance calculator to help you determine how much car insurance you need.
Compare Insurance Quotes With EverQuote
If you are ready to update your car insurance, you can get a free custom comparison with EverQuote. Insurance options vary a lot by zip code and driver profile, so the best way to find cheap car insurance that meets your current and future driving needs is to compare custom options. You can review and compare options side by side to ensure that you have the right auto insurance. You can also review a list of car insurance companies provided by EverQuote.
Check out EverQuote today to start saving!