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How Much Auto Coverage Do You Need?

How Much Auto Coverage Do You Need?

By Jeff Youngs, August 10, 2012
How Much Auto Coverage Do You Need?

You should think of auto insurance as a bundle of different policies that will take effect under different circumstances. Depending on what you drive, who drives it, and your overall circumstances, you will need some or all of these policies, and more or less coverage in different areas.

Liability insurance protects you when you are at fault for injuring another person in a vehicle accident or have damaged someone else's property.    Some states require that you carry a minimum liability package. It is almost always a good idea to carry more than minimum coverage. Most experts advise that your coverage should equal your total assets: house, investments, savings, car, portable property, everything.

Personal injury protection covers medical expenses if you are injured in a car crash. It is likely that your medical policy includes this coverage, so it is important to check your policy to make sure you are not paying for double coverage.

Uninsured motorist coverage is also another important insurance policy to have. It will  cover you in the event that you are in an accident where the other driver is at fault and either does not have insurance or doesn't have enough insurance to cover your damages.

Collision and comprehensive coverage are two areas where many motorists can save. Collision insurance will cover the cost of replacing your vehicle if it is totaled in an accident. This type of insurance is recommended for individuals who have a fairly new, expensive vehicle. Comprehensive insurance will cover the cost of your damages if your vehicle is stolen, set on fire, or vandalized. However, if  the replacement value of your vehicle is low, the cost of collision and comprehensive coverage may not outweigh the benefits. If you do decide to buy collision and comprehensive insurance, save by taking a high deductible.

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