Are you one who is wondering about How Much Car Insurance Do I need question? If yes, don’t worry because many people are confused about the exact coverage amount. In this blog post, you’ll get the answer to all your questions.
The answer usually depends on where you live, what other assets you need, and how much your car benefits. However, you need to show financial responsibility if you purchase a car. This means you must pay if driving a car causes an accident.
Additionally, every state has some form of financial responsibility law. Thus, by purchasing car insurance, most drivers amuse this demand. Doing this is an easy and most cheap way. For more details regarding car insurance, keep reading the post.
How much car insurance do you need?
First, you must purchase your state’s minimum car insurance requirements. But state minimums are poor and don’t cover your car’s repair bills. Thus, it would help if you bought more than the minimum requirements for better coverage.
However, it would help if you chose from various types of coverage. With basic knowledge, you can assemble a good policy that fulfills your specific insurance needs.
| Coverage | Okay | Good | Even better |
| Personal injury protection | State minimum | $40,000 | State maximum |
| Liability car insurance | State minimum | • $100,000 per person for bodily injury liability • $300,000 per accident for bodily injury liability • $100,000 for property damage | • $250,000 per person for bodily injury liability • $500,000 per accident for bodily injury liability • $250,000 for property damage |
| Uninsured/underinsured motorist coverage | State minimum | $100,000 per person for bodily injury liability $300,000 per accident for bodily injury liability | $250,000 per person for bodily injury liability $500,000 per accident for bodily injury liability |
Types of Auto Insurance Coverage
Liability Insurance
This type of insurance covers property damage and injuries caused by others after an accident. Besides, it also covers any settlements or judgments and legal defense. The insurance covers two types of coverage, namely:
Property damage liability: PDL pays for damage to another individual’s property when you meet with an accident.
Bodily injury liability: After the accident, pays for injuries to other drivers.
However, liability insurance is paid only to fixed coverage limits. Thus, to cover all accident-related costs, your policy may be sufficient.
Do I Need It? Yes, in almost every state, liability insurance is required.
Recommendation: To cover assets, you need enough liability insurance.
Collision and comprehensive insurance
You need collision and comprehensive insurance if you require coverage for car repair bills. Apart from this, this insurance covers many problems like vandalism, collisions with animals, car accidents, car theft, etc.
How much collision and comprehensive insurance should I buy?
Both comprehensive and collision cover the cost to repair or replace your car if found damaged. You must choose a higher deductible amount if you want to decrease costs. If you file an insurance claim, you must pay the amount yourself.
Medical payments
This coverage is often determined as “MedPay.” In some states, MedPay is required. However, it is similar to PIP. Using medical payments, you can pay medical bills for yourself and your passengers, no matter who caused the car accident.
How much MedPay should I buy?
The coverage ranges between $1,000 and $5,000 in states where MedPay is available.
Personal injury protection
PIP covers medical bills no matter who caused the accident for you and your passengers. Besides, it also pays for other expenses like funeral expenses, replacement services, and lost wages.
As part of its “no-fault auto insurance” laws, some states require PIP; in others, you can purchase PIP as additional coverage.
How much PIP insurance should I buy?
PIP insurance coverage offers range from basic to extend:
Exten covers 80% of lost wages, replacement services, and 100% of medical bills. While basic coverage covers 60% of your lost wages and 80% of medical bills.
Read Also – How To Cancel Progressive Insurance
Uninsured motorist insurance
If someone crashes you, then UMI pays for your medical bills. In some states, it is required and optional in others. Typically, you can reject the coverage in writing in states where Uninsured motorist insurance is optional. However, this coverage pays for the following:
- Car damage
- Funeral expenses
- Medical expenses for you and your passengers
- Lost wages
- Pain and suffering
How much-uninsured motorist coverage should I buy?
Sometimes, you must purchase Uninsured motorists in amounts matching your liability insurance. For instance, if you have 250/100, you must purchase the same amount of UM coverage.
What additional coverage should I consider?
You need some additional coverage to fulfill the gap. Below is some coverage that you need to consider:
Rental reimbursement insurance.
This coverage pays for a rental car if it is being repaired due to a problem covered by your policy.
Roadside assistance insurance.
If your vehicle breaks down, roadside assistance pays for services like fuel delivery, a tow truck, or a locksmith.
Gap insurance.
This insurance is needed if you’re financing your vehicle. The coverage covers the difference between the actual cash value of your car and how much you owe on your vehicle.
How to purchase car insurance?
According to data, the national average for car insurance is $1,190, with liability, collision, and comprehensive insurance. If you are searching for a car insurance policy, there is no need to focus on cost. This is because all auto insurance companies calculate their rates separately.
Thus, it is advised to compare car insurance quotes from different companies. However, you can get free quotes online by calling an independent agent. For them, you must ask about car insurance discounts.
Insurance companies offer various types of discounts, including car safety discounts, multi-policy discounts, driver discounts, and even discounts for paying in full. At last, you can reach to company’s customer service. The best insurance companies offer good customer service.
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The Final Thoughts
That’s all! The above information concerns “How much car insurance do I need.” After reading the information, you will know the right coverage for your financial situation. Besides, if you still face problems after reviewing the information, write in the sections below.
Frequently Asked Questions
How much amount required for car insurance?
| Car Insurance Plan | Premium amount |
| Comprehensive Plan | 6187 |
| Third-Party Plan | 3221 |
| Standalone Own-Damage Plan | 2966 |
How to calculate vehicle insurance?
The vehicle insurance is calculated by dividing the sum secured by the sum assured.
How to calculate the insurance amount?
Premium = (Present Value of Future Benefits) / (1+Risk-Free Rate) Time, the formula calculates the insurance amount.
What is the total cost of insurance?
The total cost is your premium + deductible + out-of-pocket costs + copayments/coinsurance.
