How Much Car Insurance Do I Need |
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Ron Stephens
15 December 2009
Here are the basic steps to help you figure out how much auto insurance you really need to have. Knowing these things will help you find the best policy for the lowest cost. Saving money on the best coverage for you is not that difficult.
Tip number 1: Where to begin
Regarding auto insurance, it is important to be adequately covered should you happen to have an accident and you don't want to pay any more than necessary. You must first of all realize that there is a lot of money to be saved. You can absolutely save hundreds of dollars every year.
When researching online I found basic coverage on two old cars ranged from $1000 to $1800 for the same coverage. That's a savings of $800! If you are paying thousands of dollars to your current insurance company for whatever reason, including tickets or accidents, comparing rates with your current policy will save you big bucks.
Tip number 2: How much coverage do you really need?
Every state has its own minimum insurance requirements. This is important to know especially if you have recently relocated to another state. Take the time to find out what your state requires for minimum coverage and then find an auto insurance company that works best for your situation.
When searching online for insurance it is easy to narrow it down to your state's minimums because these online quote services ask for your zip code. By entering your zip code, you will be directed to carriers that have the best rates for your area.
Once you find out the basic minimums for your state, you can choose additional coverages that you need. If you are extremely cautious and base your risk on the worst case possibilities, your insurance company will be happy to load you up with additional coverage that you may not need, so choose your coverage carefully.
So how do you decide how much coverage to buy beyond your state's minimum requirements?
Most experts agree that if you have a large number of assets you need to get enough liability coverage to protect them.
Let's say for example that you have $50,000 liability coverage for bodily injury but your assets are about $100,000. An attorney may go after your assets to cover any of the other party's medical bills that may exceed your $50,000 liability coverage.
Usually the recommended limit for liability coverage is $50,000 for bodily injury for one injured party per accident and $100,000 for all people injured in an accident. Also, recommended is $25,000 for property damage (over half the cars on the road are worth at least $25,000.
Let your financial situation help you determine if you go with the minimums or need to purchase more to cover your assets. If your assets do not exceed your liability limits then it is recommended that you not buy excess coverage.