How Much Auto Insurance Coverage Do You Need?

Auto insurance can add up to thousands of dollars per year. However, the financial protection (and peace of mind) it provides is well worth the cost. If this is the first time you are purchasing auto insurance, here’s a quick look at how much coverage you should opt for.

Liability for Bodily Injury

The minimum coverage required for bodily injury varies from state to state. It can be as low as $10,000 and as high as $500,000. Given how important this coverage is, it’s best you opt for more than the state-mandated minimum.

Liability for Property Damage

Again, the minimum coverage you need to have will vary from state to state, but that minimum will likely not be enough to cover you in case of an accident. So, make sure to opt for a higher amount than what is considered the “minimum coverage” in your state.

Collision

This part of your plan is what covers the cost of damage to your car in case of an accident. You don’t need to work out this amount since it will depend on the vehicle you choose to insure. But you need to decide the deductible. Remember that if you opt for a high deductible, your premium is likely to be low (and vice versa).

Comprehensive

This covers the cost of miscellaneous damages to your vehicle that was not caused as a result of a collision. So, for instance, if your vehicle is damaged due to vandalism or a fire, the comprehensive coverage will reimburse you for your losses. The comprehensive coverage you get will depend on the value of your car.

Medical Expenses Coverage

This covers the cost of medical care for both you and all your passengers in case of an untimely accident. The exact limit that you choose is the maximum you can get reimbursed when filing a claim. This means, if you choose a Medical Expense Limit of $3,000, each passenger will have a coverage of $3,000 for medical claims as a result of an accident.

Underinsured/uninsured Motorist Coverage

 If you meet with an accident and the other driver has little or no insurance, this coverage will cover the resulting expenses. The limits required are usually set by state law.