When it comes time to choose a car insurance policy, many people quickly become overwhelmed. How much coverage do they really need? What's the bare minimum legal amount of coverage? Will the minimums provide the level of coverage you need? Each person's coverage needs will vary based on their vehicle, their personal financial situation, and other key factors. Before choosing your car insurance coverage, make sure you ask these key questions.
What is the Minimum Car Insurance Coverage in Your State?
Each state has slightly different minimum requirements for car insurance. In general, however, you will need to carry:
Minimum property liability coverage that will offer coverage for personal property, particularly vehicles, that are damaged in an accident.
Minimum personal injury coverage that will cover the injuries of a specific individual or individuals injured in the accident.
In some states, uninsured or underinsured motorist coverage that will pay for your vehicle's damage or your injuries if the other driver is responsible and carries inadequate insurance
In some states, you will also be responsible for carrying personal injury protection insurance. Personal injury protection insurance generally covers the first $10,000 of personal injuries and lost time at work caused due to a car accident, regardless of who is at fault. This protection helps streamline the process of receiving coverage for your injuries after an accident.
How Much Does Your Vehicle Cost?
There are plenty of expensive vehicles on the road. You can't calculate the cost to handle an accident with all of them into your needed insurance, but you can seriously consider what it would cost to replace or repair your vehicle--especially when it comes to your uninsured or underinsured motorist coverage. If you drive a car worth $50,000 and your state's minimum liability insurance covers $30,000 of property damage, for example, you may want to seriously consider the value of adding additional uninsured or underinsured motorist coverage to your policy. With a minor increase in your monthly premiums, you can provide the coverage you need to make sure your vehicle is taken care of.
How Much Can You Afford to Pay?
When funds are tight, it's often tempting to scrimp on your car insurance. After all, what are the odds that you'll be involved in an accident? Unfortunately, if you do have a car accident, being tight on funds could mean that you end up walking--and that can be extremely stressful, especially if you need your vehicle to get to and from work or school. Before deciding to scrimp on your auto insurance policy, consider whether you can afford to repair or replace your vehicle in the event of an accident. It may be worth the expense to add collision or comprehensive coverage to your policy.
What Damages Are You Most Likely to Suffer?
Many people choose collision insurance, which will help cover their vehicle if it is damaged in an accident they caused, but not comprehensive insurance. Comprehensive insurance is designed to provide coverage in the event of other types of damages: a limb falling on your car, theft, or vandalism, for example. Before deciding to ignore these types of insurance, consider what types of damages you're likely to suffer. For example, if you frequently park under a tree, live in a bad neighborhood, or know that vandalism is common in your neighborhood, you may want to add comprehensive damage to your policy. Comprehensive coverage may also be helpful if you live in an area that is prone to weather emergencies, especially flooding or hail storms.
What Assets Do You Have to Protect?
In addition to considering your specific car insurance needs, you should also consider what the other party might take from you if you cause a car accident. For example, if you own a home, a business, and substantial property, an individual who suffers serious injuries in a car accident caused by you could sue you for the amount that your insurance won't cover--and you could lose your possessions or savings as a result. Carefully consider the assets you need to protect when considering the minimum liability coverage you need for your vehicle. Obviously, if you have little in savings and few assets, you can afford to scrimp a little on your liability coverage, since the other party can't gain anything by suing you. On the other hand, if you have substantial assets, you should include that consideration in your coverage.
Getting Car Insurance
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