How Much Car Insurance Do I Need?

How much car insurance you need depends entirely on your specific situation. Your financial situation, the car you own, how you use the car, who drives the car are all factors that determine how much car insurance you need. When trying to determine how much car insurance is enough it’s important to realize each person and situation is different.

Some factors to consider when trying to determine how much car insurance you need are:

• How much is your car worth?
• Do you have a loan on your car?
• How much are you worth?
• Do you have inexperienced drivers listed on your policy?
• How often do you drive?
• How do you use your vehicle?

All of these things can play a factor when determining how much car insurance you need. It’s important to speak with an experienced insurance agent so they can help you figure out the best coverage for your specific situation.

 

What Kind Of Car Insurance Should I Get?

When it comes to auto insurance, you have many different options. Not only do you have to decide which car insurance company to use, but you also have to decided if you should purchase “full coverage car insurance” or just purchase “liability”. Let’s break down the different options.

Which car insurance company is the best?

Not all car insurance companies are created equal. Some have great coverage options, some have great prices and some have great customer service. It’s almost impossible for you, as a normal consumer, to know which companies can offer you the best of all worlds. This is why it’s important to work with an experienced independent insurance agent. Over time an independent agent will grow to know which company can offer you exactly what you’re looking for. An independent agent is not tied to any specific company. So he or she can readily give honest advice on any company they represent. So make your life easier and work with an independent insurance agent.

What Auto Insurance Should I Get?

There are generally two types of car insurance that is discussed- full coverage and liability. I am not a fan of the word “Full Coverage” simply because it can mean different things to different people. For more on this discussion, see this blog post. For simplicity, let’s define full coverage car insurance as coverage that not only protects you with liability coverage but also covers your own vehicle. If you have a newer vehicle or an expensive vehicle, you’ll want to make sure you have full coverage.

The other type of coverage generally discussed is liability insurance. This is removing coverage from your own vehicle and only carrying coverage that will cover others that you may cause damage to and their property. If you have a very old vehicle, you may consider purchasing liability only.

You still may be asking yourself “okay, so what auto insurance should I get?”. So lets discuss in a bit more detail.

 

How Much Liability Insurance Should I Carry?

We often get asked the question “how much liability insurance do I need for my car” and we always respond the same way- You don’t need any liability insurance for your car! Liability insurance is not for your car, or even for you, it’s for other people’s medical injuries that you may cause and for damage to their vehicles or properties that you may cause. Once you understand this then you can better answer the question of “how much auto liability insurance do I need?”.

A good rule of thumb when determining how much liability insurance you need is this- as much as you can reasonable afford. Liability insurance is the most important coverage on your auto insurance policy. To fully understand this coverage, lets give an example:

You are driving down the road in your car. You get distracted and look away for a moment. When you look back up you realize you’re going to slam into the back of the car in front of you. No matter how hard you try to stop, you can’t and you hit them hard. You end up causing serious damage to the 3 people in the car. They go to the hospital and stay in the hospital for 3 weeks. The medical bills are over $100,000. 

What coverage on your auto insurance pays for this? You guessed right, it’s your liability coverage. Many times people focus so much on covering their own car and neglect that fact that incidents like this example can end up costing you so much more money than simple damage to your own vehicle.

When you consider the costs of medical expenses in today’s world, you can understand the importance of carrying a substantial amount of liability coverage. We always recommend carrying at least 250/500 and then adding a $1 million umbrella. For more information about umbrella coverage, check here. For more information about specific liability coverage, check here.

So when you ask yourself the question “how much liability insurance do I need?” take into consideration the amount of medical injurie’s you could cause someone else and then take into consideration if you want to be sued personally should you not have enough coverage on your auto insurance policy.

 

Should I Buy Full Coverage Car Insurance?

This is a question we get often. The first thing we need to point out is that full coverage has nothing to do with your liability limit or medical injury coverage. Full coverage is dealing with coverage for your vehicle. If you want to protect your vehicle and have coverage should something happen to your vehicle, then you want to purchase full coverage car insurance.

Let’s look at an example:

You have a new 2021 Chevy Tahoe. You driving down the road and trying to make a left hand turn. You don’t see a car coming straight and as you start to turn, you turn right in front of this car. Your new Tahoe is completely destroyed.

Your liability coverage will pay for those other people’s medical injuries, as we discussed above. But what pays for your Tahoe? That’s where full coverage or comprehensive and collision coverage come into play. With this coverage, your insurance company will help you replace or repair the damage to your Tahoe. You will generally have a deductible that you must pay first, but after that, your coverage will kick in and help get your car back to normal.

Without full coverage car insurance, you would just be out of luck. Your insurance company would say “sorry, but we aren’t paying anything to help repair your Tahoe”, and you would have to pay out of pocket.

So the answer is yes, if you have a newer or expensive car, you should buy full coverage car insurance. For more information about comprehensive and collision coverage, check here.

 

As always, seek the help of a professional, experienced car insurance agent. They can help you determine how much insurance you need specific to your situation. For help and to get a quote, click here. No more asking “how much car insurance coverage do I need?”! We’re here to help you!