How Much Car Insurance Do I Need

In this article I answer the question: "How much car insurance do I need?". The information here will help you know exactly what your state's minimum requirements mean to you and how you can definitely save money by purchasing car insurance from a position of knowing what's right for you.

Tip number 1: Where to begin

When it comes to buying car insurance you always want to make sure you are covered well enough to cover damages but without spending too much for your policy. It is important to know however, that you can most likely save a lot of money if you shop around. You can save hundreds of dollars a year and still be adequately covered against liability claims.

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?

Car insurance liability requirements will be different in some states, so if you have moved to another state since purchasing your current policy you should definitely compare quotes with other companies. Take the time to determine your state's minimums and then find a company that will sell you a policy for less money. It's easy to do.

Online car insurance quote services make it very easy to determine the best rates for your state. They will ask you to enter your zip code. After giving them your zip code they connect you to the car insurance companies in your area that have the best rates.

After you know exactly what is required for car insurance coverage in your state, you can add other coverages to your policy if you want to. However, be aware that insurance companies make more money by selling you more coverage. Be careful not to spend money on coverage you don't really need.

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.

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