What Kind of Auto Insurance Do You Need?


What kind of auto insurance do you need?

Want to know if you have enough car insurance coverage? It’s best not to wait until your policy gets put to the test to find out. There are some things you can assess before you buy that will help you decide how much and what kind of car insurance to get.

Auto insurance policies are bundled so you’re covered for liability, bodily injury liability and property damage liability. You can get varying amounts of coverage from each.

Liability coverage goes towards liability and expenses when you’re at fault for an accident.

Bodily Injury Liability covers medical expenses for people injured in an accident that’s your fault.

Property Damage Liability policies pay for damage done to the other car you’re in an accident with, when you’re at fault.

Then there are the policies that cover you and your car in general:

Uninsured & Underinsured Motorist coverage helps pay medical expenses for you and your passengers after a crash. It may also cover wages lost if you lose time at work due to injuries.

Collision insurance covers accident-related repairs on your car.

Comprehensive covers non accident-related expenses if your car is stolen or damaged.

How Much Do You Need?

When determining how much insurance to buy, it basically comes down to what you have to lose.

  • Generally, if you have few assets you don’t need to pay for top-tier liability insurance. But, be sure your coverage is equal to the value of your tangible and income assets. Tangible assets include real estate, cars, fine arts and other valuables; financial accounts such as banking accounts, life insurance policies and retirement accounts while income assets include businesses and rental real estate.
  • If you’re covered by health insurance, you probably don’t need to pay for personal injury coverage.
  • Want to repair or replace your car after an accident? If so, collision and comprehensive coverage will ensure you get compensated for the current value of your car.
  • It’s always wise to be adequately covered against uninsured and underinsured drivers. This will help pay for any expenses not already covered by health insurance.
  • Go with the highest deductible you can manage in order to lower your monthly premium. You’ll be covered for major damages to your car, and what you save in lower monthly premiums will hurt less than paying a $500 deductible, for instance. Then only use collision insurance to cover expensive repairs to avoid having your premiums increased.

For a more detailed look at the laws and auto insurance coverage availability in your state, see our interactive state-by-state graphic and reference guides.

Once you determine how much car insurance you need, compare insurance quotes online to get the best selection.

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