How Much Car Insurance Do You Really Need?
You should at the very least purchase state minimum car insurance requirements. However, because state minimums are insufficient, they won’t cover your car’s repair costs. If you want better coverage, you’ll have to buy more than the required amount of protection.
There are a number of coverage options to select from. You may put together a solid policy that meets your specific insurance demands with a basic understanding of the most common sorts of vehicle insurance.
Liability insurance car insurance covers others for injuries or property damage you cause when you get into a vehicle accident. It also covers your legal fees if you’re sued because of one. Here are a few examples of what liability insurance protects against:
- You rear end another car at a traffic light and cause damage
- You crash into your neighbor’s fence
- You are at-fault for a car accident and the other driver is injured
Except for New Hampshire and Virginia, every state requires liability car insurance (although various liability standards apply in certain circumstances). A minimum amount of coverage will be required. Connecticut, for example, demands that you have at least $25,000 in bodily injury to one person, $50,000 in bodily injury to multiple people in a single vehicle accident, and $25,000 in property damage (written as 25/50/25).
Here’s the issue, though: these amounts are insufficient if you cause a major automobile accident. $25,000 in property damage won’t get you very far if you total someone else’s vehicle. Medical expenditures in such circumstances might quickly exceed $50,000. You’ll be responsible for any amount above the coverage limits beyond that point.
How much liability insurance should I buy?
A reasonable rule of thumb is to obtain enough liability insurance to cover what you could lose in a lawsuit against you if you were involved in a vehicle accident.
For extra liability insurance above your base auto and home insurance policies, look into getting an umbrella insurance policy. For a relatively inexpensive amount you can buy an extra $1 million or more in liability coverage through an umbrella policy.
Uninsured motorist insurance
If you get in a car accident and the other driver does not have liability insurance or simply isn’t enough, your medical expenses will be covered under UM and UIM coverage. In certain circumstances, uninsured motorist coverage is required by law.
If you live in a state that allows UM, this is a good policy to have. This coverage will pay for the following:
- You will be reimbursed for any transportation-related medical expenses, as well as those incurred by your passengers.
- If you are unable to work owing to injuries incurred in a vehicle accident, you will have missed wages.
- Funeral expenses
- Pain and suffering
- Car damage
How much uninsured motorist coverage should I buy?
You’ll generally need to buy UM in amounts that correspond to the amount of liability coverage you have. If you have 250/500/100, for example, you’ll need the same amount of UM protection.
Collision and comprehensive insurance
If you want car insurance coverage for car repair bills, you need collision and comprehensive insurance. They are typically sold together and cover a range of issues including automobile accidents, vehicle theft, vandalism, animal collisions, falling objects, fires, floods, and hailstorm damage. If you have a car loan or lease from your lender or leasing company, it will almost certainly demand that you carry both policies.
How much collision and comprehensive insurance should I buy? If your vehicle is damaged by a covered cause, both types of coverage will pay for the cost of repairing or replacing it. Select a higher deductible amount if you want to save money on premiums; this is the amount you’ll pay out of pocket if you file an insurance claim. When compared to a $500 deductible, a $1,000 deductible will result in somewhat lower premiums.
MedPay is a form of medical payments coverage. It’s similar to PIP in that it covers your and your passengers’ medical expenses, regardless of who was at fault. Some states require MedPay, which is similar to PIP. If you buy car insurance in Pennsylvania, Maine, or New Hampshire for example, you must get MedPay.
Optional Car Insurance Coverage Types
A car insurance policy is only as good as the underlying coverage it has. A comprehensive liability insurance, uninsured motorist coverage, medical payments, and collision and comprehensive insurance are all essential start. However, to fill in some gaps, you may need a few extra coverage options. Here are some ideas to think about.
- Gap insurance. If your automobile is damaged as a result of a covered incident, such as a vehicle accident or fire, gap insurance will reimburse you for the difference between the real cash value (ACV) of your car and how much you owe on the loan or leases. For example, if you have $15,000 outstanding on your loan but your car’s value was $13,000, this coverage pays the $2,000 gap.
- Rental car reimbursements. This coverage pays for a rental car or alternate transportation such as train and bus fare while your automobile is being fixed due to a covered peril.
- Roadside assistance insurance. If your automobile breaks down or you experience an unforeseen issue, For a small fee (like locking your car keys), this covers services like as towing, jump-starting, fuel delivery, or locksmithing.
How to Buy Car Insurance
According to the most recent data from the National Association of Insurance Commissioners, the average cost of automobile insurance with liability, collision, and comprehensive coverage is $1,190 nationally. When you’re seeking for a car insurance policy, however, you shouldn’t simply consider price.
That’s because car insurance providers arrive at their premiums differently, resulting in a significant difference—sometimes by thousands of dollars per year. It’s a good idea to comparison shop for vehicle insurance rates. You may get free quotes from the internet or by calling an independent agent in your region.
Make sure you inquire about any car insurance discounts that are available. Insurance companies provide a variety of incentives to entice consumers.—They offer a variety of discounts for auto insurance, ranging from excellent driver reductions, vehicle safety incentives, multi-policy discounts, and even price reductions for paying in full or going paperless.
Last but not least, think about a firm’s customer service. The finest car insurance providers offer both low premiums and excellent client service. If you are involved in a vehicle accident, you want to make certain that your automobile insurance policy will handle the claim process as smoothly as possible.
American Financial Solutions is an Insurance Agency that offers Auto Insurance services. Based in Waterbury, Connecticut, American Financial Solutions has been helping customers save money on their car insurance for over years. If you’re looking for quality auto insurance coverage in the Waterbury area, American Financial Solutions is the place to go. We offer a wide variety of policies from some of the leading providers in the industry, and we’re always happy to help our clients find the coverage that’s right for them.
American Financial Solutions is a full-service Insurance Agency offering car Insurance in Waterbury and the surrounding areas. We are dedicated to providing our clients with the coverage they need at the most competitive rates possible.