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How Much Car Insurance Do I Need?

Purchasing a vehicle that fits your needs and budget is incredibly important. Finding the right car takes detailed research and planning, and finding the right auto insurance policy for your vehicle is critical to protect both your vehicle and yourself.

Wondering know how to shop for car insurance? Here are the most important guidelines to keep in mind when looking for the best auto insurance policy for your specific needs.


How Much Auto Insurance Coverage Do I Need?


How much car insurance do I need and how much is required are two different questions. State requirements tend to be much lower than the amount necessary to protect you financially in the event of a crash.


How Much Does Car Insurance Cost?


The cost of auto insurance differs based on your provider and type of coverage.


Some of the best liability coverage for most drivers is 100/300/100, which is $100,000 per person, $300,000 per accident in bodily injury liability and $100,000 per accident in property damage liability.

Remember, you'll be held responsible for all damage you cause in a crash, so a minimal liability policy of 100/300/100 will secure your assets and future earnings.


What Does Full Coverage Car Insurance Consist Of?


An auto insurance policy is actually a package of several individual insurance policies. The most common policies under the auto insurance umbrella are:


  • Comprehensive policy

  • Uninsured/underinsured motorist policy

  • Bodily injury liability

  • Property damage liability

  • Medical obligations or personal injury protection

  • Collision policy


Depending upon the state you live in, some of these coverages may be mandatory while others may be optional. Comprehensive and collision policies aren’t required by law, but that doesn’t mean you don't need them.


What Kind of Car Insurance Do I Need?


If you've got a loan on your car or truck, your creditor will require comprehensive and collision protection. Other policies, like gap coverage or windshield policy, may also be requirements by your lender to ensure you are protecting their investment.


These policies are also a good idea in case you can't replace your car if it's totaled or couldn't afford a major repair out-of-pocket.


If you can't manage a minimum of 100/300/100 in liability coverage, you might still want to decide on the largest quantity of coverage you are able. If 50/100/50 is the highest you can go, you may want to choose that rather than considering the state minimums.


If you can manage over 100/300/100 along with what your insurance carrier offers, you could take the higher rates of coverage. There are some expensive cars on the road, and the typical personal injury compensation in a car crash is $52,900. Having greater levels of insurance will be a significant part of protecting yourself financially.


Car Insurance Requirements by State


Your location will impact the amount of auto insurance coverage you need, and you will need to make sure to abide by state law when shopping for auto insurance.


Twenty-two states and the District of Columbia have uninsured driver (UM) or non motorist (UIM) coverage requirements.


Those states are:

Connecticut, Illinois, Kansas, Maine, Maryland, Massachusetts, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, North Dakota, Oregon, Rhode Island, South Carolina, South Dakota, Vermont, Virginia, West Virginia, Wisconsin, and D.C.


Though New Hampshire does not call for car liability insurance, motorists in this state need to show financial responsibility to cover accident costs and purchasing insurance, which may comprise UM coverage.


Thirteen states require private injury protection (PIP) coverage.


Those states are:

Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, Utah and Pennsylvania.


Having trouble choosing the right auto insurance policy? Click here to get in touch with our team of experienced car insurance professionals.

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