Next time you are on the freeway, think about this: About one in eight US drivers on the road does not have car insurance, according to the most recent estimate by the Insurance Research Council. With that many people driving without coverage, it is more important than ever for you to be insured. But how much car insurance do you need?More than the minimum
Your inclination could be to get the minimum insurance coverage required by law in your state. The problem with minimum coverage is that it may not fully protect you - or your assets - if you are at fault in an accident. It is a better idea to carry more of the minimum coverage unless you are driving an older car with little value and have no assets to protect.
Every state in the nation except for New Hampshire requires you to have liability insurance. In Alabama, for example, the minimum requirements are $ 25,000 of bodily injury liability for one person, $ 50,000 of bodily injury liability for all persons in an accident and $ 25,000 of property damage liability. Another type of coverage, Personal Injury Protection (PIP) or a system called MedPay in some states, pays for your own medical expenses, any lost wages, and any other costs that may arise when you is injured in an accident. He usually pays about 80 percent of his losses, and also pays a death benefit.
Some states also require you to purchase car insurance that covers your medical expenses, pain and loss of suffering and, in some states, damages in the car, in the event that the other driver is guilty and is not insured or underinsured. That mandatory coverage varies by state. Review this table from the Insurance Information Institute to see what your state requires.
Coverage to protect your assets
Despite the minimum requirements required for bodily injury liability, it is probably in your best interest to buy higher limits. If someone is injured and you are to blame, the minimum liability coverage may not cover the other driver's medical expenses, in which case he or she will likely come after your assets. Insurance experts generally recommend that you purchase 100/300 bodily injury liability limits (ie $ 100,000 for one person in an accident and $ 300,000 for all people injured in an accident). On the other hand, if your personal assets are not much, there is little for another driver to get if he sues. The minimum requirements may really suit you and will save you some much needed money.
Collision and comprehensive
In addition to various forms of liability insurance, there are collision and understandable auto insurance coverage to consider. Collision insurance covers damages to the insured's car resulting from operating on anything, whether it be another car, a fire hydrant or a light stand. Comprehensive coverage takes care of your car in case of theft, fire, falling objects, explosions or other unexpected problems.
Collision insurance and comprehensive coverage are required in most leases, and are essential if you own an expensive car. If you are handling a rattle on the other hand, and the sum of your premium and your deductible are close to the value of your vehicle - or if you exceed it - you may want to consider doing without this coverage.
Review your needs
Before you buy any type of auto insurance coverage, be sure to study your other insurance policies so that you do not end up paying for something you do not need. If you have a decent health insurance plan, you may get away with buying minimal personal injury protection protection - or none at all if your state does not require it. However, you may end up paying a copayment and deductible that would not apply if you have PIP or MedPay.
Uninsured motorist coverage or uninsured can also be a wise purchase even if you have full medical coverage because you can pay for your pain and damages for suffering. If your insurer offers you roadside assistance coverage, you may not need it if you already belong to an organization like AAA that offers it. The same applies to mechanical damage insurance. If you own a newly financed or leased vehicle that is still covered by the warranty, such coverage is unnecessary.
It is easy to resent having to spend money on insurance. But keep in mind that auto insurance will most likely go to your rescue at some point, so it is imperative to buy a policy that is worth it. Know what coverage you must have to protect your assets and what additional coverage is