Budget Concerns: How Much Insurance is Enough?

Determining How Much Auto Insurance Coverage You Need

9 February 2015

Dustin Duncan

When you are getting ready to purchase auto insurance for your car, you may be a bit confused and not know how much auto insurance you really need. It can be hard to determine how much is enough, and when you may be paying for things you don't need coverage on. This article will give you a better idea as to how much auto insurance you should have.

The First Steps

When you are looking to purchase auto insurance, start by determining this basic information:

• Your state's minimum insurance requirements. It's very possible that the minimum coverage required by your state is all that you need. 
• Make sure you are covered for an amount equal to how much your assets are valued at. 
• If you want lower premiums, choose a high deductible for collision coverage.

Important Coverage 

 Your auto insurance will coverage for a lot of different areas, but these are the most important areas to cover.

• Liability. Liability covers expenses and liability when you are the person deemed at fault for an accident. It will pay for the people who were involved in the accident with you, but not for anyone in  your car.
• Bodily Injury Liability. This pays for the medical expenses of anyone injured in an accident that was your fault. There are certain percentages as to how much is covered. You may notice a bodily injury liability being a 100/300 policy. This means the maximum amount the policy will pay for someone's injuries and a maximum on all injuries in total. So for a 100/300 policy, the maximum amount paid for one person would be $100,000, while $300,000 is the maximum amount the policy will pay for all injuries combined. 
• Property Damage Liability. This is coverage for damage done to the other car in the accident. 

Coverage for Yourself

When determining coverage for yourself, you really don't need to spend a lot of money on personal injury protection. You will be covered under your own health insurance policy, so you only need to purchase the required minimum. You do need to make sure you have enough coverage for under-insured and un-insured drivers, but that's not usually expensive.

You will also want to make sure you have ample collision and comprehensive coverage. This portion of your policy will have a deductible, so talk with your insurance agent about how much your deductible should be, based on the value of your car. To learn more visit Affordable Insurance. 

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