How Much Auto Insurance Do I need?
Car insurance is designed to protect your assets from lawsuits that could arise as a result of an accident. Whether or not an accident is your fault, if you are found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. Therefore, it is imperative that, when deciding your coverage level, you focus on getting enough insurance to adequately address any claims, and keep you and your family on a sound financial footing. Our licensed agent or broker can help you make decisions regarding adequate protection.The first step is to choose your coverage level. The Insurance Information Institute (I.I.I.) recommends that you get $100,000 of bodily injury protection per person and $300,000 per accident. If your net worth is more than $300,000, consider buying additional liability insurance. You should also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverage is exhausted, and typically cost between $200 and $300 per year for a million dollars in coverage.
In addition to liability coverage, consider adding collision and comprehensive coverage when requesting an auto insurance quote. This coverage amount is based on the market value of your car and the cost of repairing it, so the maximum you can recoup is typically the actual cash value of the vehicle. For collision and comprehensive you will need to select a deductible. The selected deductible is your proportionate share of the claim. Your claim must exceed the selected deductible in order for the insurance company to pay for damages to your vehicle. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.
This article adapted from information provided by the Insurance Information Institute
