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What is the recommended auto insurance coverage by insurance companies?

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Things to Remember...

  • While auto insurance is a legal requirement, surprisingly one out of seven drivers in the United States are under or uninsured
  • Some states, such as Florida, Kansas and New York (among others) also require that you have personal injury protection (PIP)
  • While not all coverage is required, adding additional coverage, such as collision and comprehensive, can be a good idea

It is a legal requirement to have auto insurance but there is nothing to state how much cover you need. There are many different policies available and some are cheaper than others. Do you just opt for the cheapest cover available?

Will you need high levels of cover? It is important to consider the level of auto insurance coverage that you will need.

To compare car insurance quotes and see coverage options, enter your ZIP code into our FREE auto insurance comparison tool right now!

While auto insurance is a legal requirement, surprisingly one out of seven drivers in the United States are under or uninsured. This means that if they crash into you, there is nothing to protect you financially unless you have the right type of coverage to help.

The problem with opting for the minimum cover that your state requires is that that may not be enough to cover an accident, whether you are at fault or whether an uninsured driver is at fault. On top of that, it will also be dependent on the age of your car.

The Coverage that You Need to Have

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It is important to look into the minimums for auto insurance in your state. Each state does have its own laws but most have liability insurance as the minimum requirement all but New Hampshire.

There are minimum limits of liability that are required:

  • Liability for bodily injuries for one person during an accident
  • Liability for the bodily injuries of all those involved in the accident
  • Liability for the damage to the property during one accident.

The amounts for the three differ between states along with different ways of saving.

Some states, such as Florida, Kansas and New York (among others) also require that you have personal injury protection (PIP).

This is known as medical payments in some of the states and will pay for any medical expenses that you have, loss of wages and other costs due to injury during the accident. This will also pay out a death benefit in case of death during the accident.

Some states understand the danger and damage during an accident that involves an uninsured driver, especially if it is their fault. Because of this, these states have a requirement to purchase coverage for that.

This cover will help with the costs towards any medical expenses and loss that is experienced during the accident that was the fault of someone without insurance.

Some states will also help with the cost of fixing your car that was damaged due to the fault of a driver who did not have the adequate auto insurance coverage.

Always remember that your auto insurance coverage should be recommended specifically for you. Know exactly what you’re looking for and compare rates to get the right coverage for the right price.

What coverage should you get?

While there are minimum requirements, sometimes they are not enough, even from the best companies. For example, the minimum for liability coverage may not be enough to cover the medical expenses of all those involved in an accident that was your fault.

This would mean that the injured parties would have the right to sue you and claim the money back through your assets.

If your assets amount up highly, you could lose out more by allowing it to go this far; however, if they are a low amount, it is the injured person who loses out and you will save money by taking the minimum coverage.

This is something that you will need to weigh up before you start looking at taking the extra insurance.

Another option is to look into getting coverage against uninsured and underinsured drivers. You may feel like you will not need it, especially if you have had your license for years without a single crash, but you have no idea what the other drivers on the road are like.

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Comprehensive and Collision Insurance Coverage

There are other types of auto insurance coverage, such as comprehensive and collision insurance.

These are two that are not state requirements but are worth considering; they could lead to helping cover a number of costs if you are involved in an accident that is your fault.

Collision coverage helps to cover all damage that happened to the car of the policyholder during a crash. This crash could have been with another car or it could have been with a stationary object. This will help to cut down your costs when it comes to fixing your vehicle.

Meanwhile, comprehensive coverage will help with the costs if there has been a theft, a fire, or any other unexpected incidents.

If your car is expensive, it is worth considering these types of coverage. However, if you have an old car that is not worth much, you may find that the cost of the coverage amounts to more than the car; you would lose out financially if this was the case.

Of course, the choice is completely up to you but you also need to remember that there is usually a deductible connected to these types of cover.

What other insurance do you have?

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You may not need all of the different auto insurance policies if you have other insurance that covers the costs. For example, there is no need to get PIP if you have a health insurance plan that will cover the cost of your medical expenses.

This only applies if there are no state requirements to have PIP. It is worth checking your different insurance policies to make sure that you are not doubling up anywhere this will cause you to spend more money than you really need.

You should also check any organizations that you belong to. Some cheap auto insurance companies will offer breakdown assistance with their insurance policies. While this is a great option for many people, it is not needed by everyone.

You may already have this type of coverage if you belong to some organizations so it is worth checking first of all.

This is also the case for a mechanical breakdown if you have a leased or newly financed car that still has the warranty since these faults will be covered by the warranty.

While you may resent the need to spend more money on your insurance coverage, there are times you will thank yourself you did. Insurance is a terrible thing when you have not had to make a claim but the minute that you need to, it is your best friend.

The trick is to have the right levels of coverage for you. Enter your ZIP code into our FREE auto insurance comparison tool to see rates for you right away!

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