How much car insurance should you buy?
Getting insurance quotes and buying auto insurance could be rather confusing as well as financially taxing once you are not familiar with the kinds of coverage you require. A lot of people make this pitfall of buying just the minimum coverage. There are also a similar number of people make the mistake of buying too much, or purchasing comprehensive while they do not really need. Acknowledging how much car insurance you should buy could get confusing.
However, don’t worry because here we will help you determine if you require a particular coverage for your car.
- Liability Insurance
You should know that liability coverage is a necessary in most states, so if your state does not offer other options and you select to take it, chances are you must buy liability insurance.
The purpose of this type of insurance is covering damages to the property of another person as well as the medical expenses of that person in a car accident that you cause.
However, if the accident is serious, the minimum auto insurance coverage that is required by law may not be enough. In fact, the amount of liability insurance needed depends on the worth of your assets, but experts typically recommend carrying minimum $300,000 protection of bodily injury and $100,000 protection of property damage.
Read more: How to choose the best car insurance company
Other Types Of Car Insurance Coverage
Aside from liability insurance that is often mandatory, you may also consider the following optional types of coverage:
- Collision coverage: covers the damage to your car if your car hits another object or vehicle.
- Comprehensive coverage: covers the damage to your car because of non collision-related incidents such as vandalism, theft, weather conditions and natural disasters.
- Underinsured / uninsured motorist coverage: covers the insurance holder in the event of accidents with an insufficiently insured or uninsured driver.
- PIP – personal injury protection: covers the medical costs which are not covered by the liability insurance policy of the other driver.
If you possess an expensive car, or you live in extremely populated area, or you usually commute in heavy traffic, then you should consider all types of coverage above. It is also worth noting that not all types of coverage mentioned before are available to you.
How Much Car Insurance You Should Buy
Keep in mind that you need meet the minimum requirements for car insurance in your state. Oftentimes, you will be required to possess certain amounts of liability insurance. Nonetheless, it is also a good idea to buy higher limits as well as more coverage than what will be required. You should decide your car insurance after considering:
- Your own assets: if your car is expensive or valuable, you need to have more protection for it.
- Your own budget: buy only what you could reasonably afford. Once you could not pay your premium, you are risking nonpayment of premium, leading to lapse of coverage and cancellation.
- The level of risk you could deal with: if you feel you could pay much out of pocket in case of a claim, you might be fine with higher deductibles or lower limits.
- Your car: if you have a valuable car, go for comprehensive coverage. If you car is not worth so much, it is not necessary to waste your money for the cost of comprehensive coverage.
How Much Is Auto Insurance?
This is a common question among those new drivers. To be honest, there is no specific number of setting a car insurance policy. The cost of your policy may vary hugely, based on different factors including your agent, your driving record, and the coverage kinds as well as limits you select.
How much is car insurance for the new motorist?
This varies by insurers, yet you may have to pay more if you are a new driver or a teen. As you have not much experience, you will be considered having higher risk on the road. As a result, you will be charged with higher rates.
If you have a teen driver, you could simply add him/her to your current car insurance policy to save money, but you will also see an increase in your current premium.