How much auto insurance do you need?

Some people say "just give me the minimum." That's the lowest price. That's a good method except for the unpredictability of accidents. And there's no guarantee an accident won't be your fault, and we can't dictate the severity. Even if an accident is not your fault, what if the other driver has no insurance?Or is underinsured? Your bills have to be paid by someone.

State law tells us we have to have minimum amounts of auto insurance. You can reduce your auto insurance premiums like most people by getting bare bones liability only coverage. But is it worth the extra risk?

Instead of starting off with your State minimums as a benchmark, why not use what you have to lose in an accident?

In an accident, your insurance company will pay the damages up to your chosen limits, and anything over and above your limits, you will have to pay. Since I have some income and assets I would like to protect, I will typically choose 100/300 in coverage. That means if I cause bodily injury, I am covered (minus my deductible) to $100,000 per person and $300,000 total per accident.

I choose full coverage with minimal deductibles since my cars are newer and worth more. Also I don't like to think I am paying a lot for insurance, then have an accident and discover I have to pay a $500 of $1000 deductible.

I choose to have rental car coverage, in case my car is totaled or in the repair shop.

I am 40+ years old and holding. If you were a student, or broke, or both, you could use the bare minimums. But keep in mind, legal judgments you have against you now last for 10 years and can be renewed without limit.

Go to my page about explanations of coverage page to learn more about insurance terms and how the benefits work.

In summation, think about your future potential to earn and your assets when deciding about your much auto limits. With a more comprehensive policy, you may save may in the form of in court fees, wage garnishments, co pays, etc.

Read my auto insurance needs FAQ.