What is typical auto insurance coverage?

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Things to Remember...

  • Each state has it’s own legal minimum coverage amounts in place
  • The type of insurance that you choose may have the biggest impact on your rates
  • You may have heard some people refer to these numbers in their shorthand – these numbers specify how much your insurance company will cover in the case of an accident
  • Other factors that affect your premium include driving history and the make of your car

Shopping for auto insurance coverage sounds like it would be pretty easy at first. Yet if you are like most people who have shopped for coverage in the past, you may have been asked by an insurance agent and didn’t know how to answer the question, “What coverages do you want?”

Many people believe insurance cost is based on a driver’s age, driving history, and the type of car being insured, without giving any thought to the level of coverage that an insurance company provides.

Yet, the type of insurance that you choose may have the biggest impact on your rates. So just how much coverage do you need or want, and how much can you afford?

Use our FREE comparison tool to see what rates are available for you!

State Requirements

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Each state has it’s own legal minimum coverage amounts in place. In order to conform with state law, you do have to carry proof of minimum coverage with you while driving.

However, there is a difference in state minimum auto insurance coverage by state. You may have heard some people refer to these numbers in their shorthand.

For instance, Florida’s minimum required coverages are 10/20/10 while Alaska’s minimum coverage requirements are 50/100/25.

You may be wondering what these numbers mean. The first two numbers indicate the amount of bodily injury liability coverage included in the policy.

The first number specifies a “per person” amount of coverage, while the second number specifies the total amount of coverage per accident.

So in Florida, minimum coverages provide for up to $10,000 in bodily injury liability coverage per person, with up to $20,000 covered per accident.

The last number reflects property damage liability coverage. Because the coverage amounts for each state vary, you should be aware of what your own state’s requirements are.

Why You May Want More Coverage

If you have never been in a serious car accident and have never had to file an auto insurance claim, you may not fully understand how these coverages affect you.

The numbers explained above reflect the maximum amount an insurance company will cover you for, in the case of an accident.

That means any money required beyond those amounts will come out of your own pocket.

For instance, assume you live in Florida and have a 10/20/10 policy in place. If you had a car accident where 3 people were hurt, with $10,000 in medical bills each, insurance would pay for $20,000.

You would have to come out of pocket for the remaining $10,000.

Keep in mind that you may be responsible for the injuries in the other car too and those people could sue you for damages to collect money owed. Because of this, many people do consider bumping up their coverages beyond the state minimum.

Any coverage obtained in excess of the state minimum requirements is a personal decision.

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Your Premium and Minimum Coverage

You certainly do want to narrow down the amount of coverage you want on your auto insurance policy before you shop around.

The amount of coverage you are requesting will be one of the first questions an agent asks you when contacting them for a quote.

However, there are other factors that can affect your premium cost, too. These include:

  • Your Driving History
  • The Make, Model, and Year of Your Car
  • Safety and Security Equipment on Your Car
  • Your Age (drivers over age 25 generally are offered lower rates)
  • Qualification for Discounts (multiple policy discounts, driver’s safety discount, etc.)

Not too many years ago, drivers had to call around from insurance company to insurance company to get quotes on auto insurance coverage. This took a significant amount of time and effort.

There are dozens of auto insurers, and shopping around to a handful of them generally will not provide you with the lowest rate.

There are dozens of auto insurers, and shopping around to a handful of them generally will not necessarily provide you with the lowest rate.

Therefore, comparing multiple car insurance quotes all in on place online is a good way to see the options available.

Now the internet provides drivers with a better way to shop for coverage. You can make use of price comparison websites to get a quote today

Ways to Save On Coverage

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For drivers who are serious about saving money on their car insurance but who do not want to reduce their coverage amounts to save money, there are other ways to save on your insurance cost.

Many insurance companies offer a variety of discounts.

Discounts may include those for married couples, for safe drivers, for policy renewals, for multiple cars insurance, for moving life or home insurance to the same company, and so on.

While shopping around, be sure to ask about discounts offered to see if you can save some costs. The fact is that there is no catch-all answer to the question of how much coverage you should have.

Coverage is something that is often determined by a combination of factors such as the state minimum requirements for coverage, the driver’s budget, and the driver’s comfort level.

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