How Much Auto Insurance Do I Need to Buy?
This is one of the most common questions among first-time car buyers. How much auto insurance do I need to buy? The answer, as usual, is that it depends. I'll offer some suggestions on how much insurance in just a moment. But first, let's talk about the different types of auto insurance coverage you can buy.
Liability -- This is the one type of coverage that drivers are required to have by law. Each state has a minimum requirement. So in order to find out how much auto insurance you may need, you'll first need to learn what your state requires in the way of liability coverage. Liability covers other people that may be injured through some fault of your own (their car damage, their hospital bills, etc.).
Liability also provides some degree of coverage for you, in the event that you are sued. You should start here when determining how much auto insurance you need, because this component is mandatory.
Comprehensive -- This form of auto insurance would reimburse you for expenses related to fire, theft, vandalism, or damage to your car from natural causes (hail, lightning, tree limbs, etc.). In other words, it protects you from damages other than those caused by a collision. And that brings us to the next type of auto insurance coverage.
Collision -- This is the part of your auto insurance that covers damages resulting from an accident, when you are the one at fault.
There are other types of coverage you may be offered by an insurance company, but the three listed above are the most common.
Now that you know the different types of coverage, we can revisit the primary question we started this article with. How much auto insurance do I need to buy? We talked about the minimum coverage you are required to have by law (liability). This covers you and others when you are the one who causes an accident. So this is your starting point when determining how much insurance you need, because it's also a requirement for registering a car in most states. You simply have to have liability, plain and simple.
You should be able to find your state's minimum requirement by doing an Internet search. A handful of states don't have a legal requirement for liability insurance, but most states do. You can do a search on the Edmunds.com website to get started, or you could do a Google search such as: "Arizona auto insurance +how much liability required" ... plugging in your state, of course.
Some states also require you to have personal injury protection (PIP), also known as medical payments coverage. This would cover your medical expenses in the result of injuries from an auto accident. An insurance company can tell you what's required in your state, and you can also look it up on your state's DMV website or the official state website.
This brings us to the optional forms of auto insurance coverage. Here is where it becomes a matter of personal preference. How much comprehensive and collision coverage you choose should be partly based on the value of the car you are insuring. If you have an expensive car, you would want more coverage. On the flip side, if you're driving a low-value car, you might not need as much of these coverage types -- if any.
So, how much auto insurance do I need to buy? To answer this question, you must start with the minimum amount required by your state, because there's no getting around this. Then you should choose an appropriate amount of collision and comprehensive based on the value of the car.
Bonus Tip: Another good way to figure out how much auto insurance you need is to get an online quote from a provider. You can use the box at the top of this website to get started. When you get an online quote for insurance, the website will walk you through the various choices discussed in this article. Then you can figure out what that would cost you in premium payments each month.
Liability -- This is the one type of coverage that drivers are required to have by law. Each state has a minimum requirement. So in order to find out how much auto insurance you may need, you'll first need to learn what your state requires in the way of liability coverage. Liability covers other people that may be injured through some fault of your own (their car damage, their hospital bills, etc.).
Liability also provides some degree of coverage for you, in the event that you are sued. You should start here when determining how much auto insurance you need, because this component is mandatory.
Comprehensive -- This form of auto insurance would reimburse you for expenses related to fire, theft, vandalism, or damage to your car from natural causes (hail, lightning, tree limbs, etc.). In other words, it protects you from damages other than those caused by a collision. And that brings us to the next type of auto insurance coverage.
Collision -- This is the part of your auto insurance that covers damages resulting from an accident, when you are the one at fault.
There are other types of coverage you may be offered by an insurance company, but the three listed above are the most common.
How Much Insurance is Enough?
Now that you know the different types of coverage, we can revisit the primary question we started this article with. How much auto insurance do I need to buy? We talked about the minimum coverage you are required to have by law (liability). This covers you and others when you are the one who causes an accident. So this is your starting point when determining how much insurance you need, because it's also a requirement for registering a car in most states. You simply have to have liability, plain and simple.
You should be able to find your state's minimum requirement by doing an Internet search. A handful of states don't have a legal requirement for liability insurance, but most states do. You can do a search on the Edmunds.com website to get started, or you could do a Google search such as: "Arizona auto insurance +how much liability required" ... plugging in your state, of course.
Some states also require you to have personal injury protection (PIP), also known as medical payments coverage. This would cover your medical expenses in the result of injuries from an auto accident. An insurance company can tell you what's required in your state, and you can also look it up on your state's DMV website or the official state website.
This brings us to the optional forms of auto insurance coverage. Here is where it becomes a matter of personal preference. How much comprehensive and collision coverage you choose should be partly based on the value of the car you are insuring. If you have an expensive car, you would want more coverage. On the flip side, if you're driving a low-value car, you might not need as much of these coverage types -- if any.
So, how much auto insurance do I need to buy? To answer this question, you must start with the minimum amount required by your state, because there's no getting around this. Then you should choose an appropriate amount of collision and comprehensive based on the value of the car.
Bonus Tip: Another good way to figure out how much auto insurance you need is to get an online quote from a provider. You can use the box at the top of this website to get started. When you get an online quote for insurance, the website will walk you through the various choices discussed in this article. Then you can figure out what that would cost you in premium payments each month.
Labels: auto
posted by Brandon at
8:49 AM
