How do you choose from the recommended car insurance coverage amounts?

Each state has its own requirements when it comes to car insurance. When you go to purchase a policy, you will have to meet the minimums as the insurers cannot sell anything less. That can help you choose the right amount of car insurance coverage amounts. Your personal preference also influences the right amount of auto insurance for you. Use our online insurance calculator to determine how much coverage you need.

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Tonya Sisler has a Bachelor’s Degree from the University of South Carolina in Journalism and has worked for 15+ years in management. She has also completed a proofreading certification and is currently a professional writer.

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Brad Larson has been in the insurance industry for more than a dozen years. He started out as a claims adjuster for a national carrier. He has since switched to the agency side of the business. Brad is licensed in all P&C lines.

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Reviewed by Brad Larsen
Licensed Auto Insurance Agent

UPDATED: Jun 4, 2021

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When the time comes to obtain or renew car insurance, you may be overwhelmed by the choices when it comes to car insurance coverage amounts. Should you go with the minimum amounts recommended by your state or should you purchase additional coverage so you have no out of pocket expenses? This is a fine line that must be walked to ensure you get the coverage you need without decimating your budget in the process. Get started now by entering in your ZIP code and receive FREE car insurance quotes!

Following the Requirements

Each state has their own requirements when it comes to car insurance. When you go to purchase a policy, you will have to meet the minimums as the insurers cannot sell anything less. It’s when you choose to up the amount of coverage that things become confusing. Do you need protection against uninsured drivers or are you worried about high medical bills that you may be responsible for? Prioritizing what is important to you is one way to narrow down the choices. Looking for a good car insurance quote? Enter in your ZIP code now!

Another thing to remember when purchasing car insurance is that some states require you pay for damages to your car no matter who is responsible. You can’t control the driving habits of others. This also includes family members such as teenagers so ensure your coverage protects you when someone else is behind the wheel.

Accidents happen no matter how much we try to prevent them. You want to be ready when one does occur.

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Different Types of Coverage

Here are some types of coverage you want to have and how much you should consider purchasing in each category.

Bodily Injury Liability

Bodily injury liability is coverage that is required by all states although the amount you will be required to purchase may vary. This protection is designed to pay the medical expenses of other parties injured in an accident that you caused. The insurer will pay these expenses up to the amount you are insured for.

If you do not have enough insurance to cover the cost of their medical expenses, you will be required to pay the difference. Experts recommend that you purchase a policy that covers $100,000 per person with a maximum of $300,000 per accident. This will protect your home and other assets from being taken if a lawsuit is filed.

Property Damage Liability

Property damage liability is a requirement of all states. If you are at fault in an accident, this portion of your policy will pay for damage to the other person’s vehicle and property. This includes buildings or structures that you may damage during the accident.

Be aware that property damage liability only protects the property of another person. This coverage does not protect your car or structures if they are involved in the accident. The amount of minimum coverage you must person varies by state here also. Most experts recommend that you purchase between $50,000 and $100,000 of coverage per accident.

Unisured/Underinsured Motorist

Some states have laws in place requiring you to obtain uninsured/underinsured motorist coverage. Connecticut and Illinois are two that fall into this category. This type of coverage is designed to protect you in the even you are hit by someone who does not have auto insurance or has less than what is necessary to cover the damage you incur as a result of an accident they caused.

This motorist coverage assists you in paying medical expenses or damages to your property or vehicle. This protects you from being forced to pay these bills out-of-pocket. Even if you have medical insurance, experts often recommend that you purchase this type of protection to save yourself from unexpected high expenses. As with bodily injury liability, experts recommend purchasing $100,000 worth of coverage per person and $300,000 per incident.

Unisured Property Damage

You may also be offered uninsured property damage. This is very similar to uninsured/underinsured motorist liability. The main difference is that it only pays for damage to your property. The amount it pays is very small in most cases also.

Personal Injury Protection (PIP)

The purpose of personal injury protection is to pay any medical expenses or funeral expenses of the policy holder, other drivers on the policy or pedestrians injured by the policy holder. This also covers passengers of the vehicle in an accident.

If you participate in a carpool or frequently drive others, this type of protection should be mandatory. The purchase requirements vary by state. Be sure to carefully read what is covered under this type of policy. Some cover loss of wages and other expenses in addition to medical expenses.

Collision Coverage

Collision coverage protection covers damages to your vehicle once your deductible has been met. This is for accidents where you are at fault. Collision cover should be for an amount equal to replacing your car. Many with older cars choose not to purchase this type of coverage due to the fact that the car has very little value.

Comprehensive Coverage

Comprehensive coverage is similar to collision insurance and covers any expenses incurred as a result of fire, theft and Acts of God among other things. No states require this type of insurance. If you have a car loan, your lender may require that you obtain this type of coverage until the vehicle is paid in full and the same is true if you lease a car. Again, you should choose enough coverage to replace the vehicle in the event it is a total loss.

Additional Coverage Options

Medical payment policy covers any medical expenses for you and your passengers if an accident occurs. The policy will also cover any expenses if you are hit by a car while walking. The policy pays out no matter who was responsible for the accident.

If you have medical insurance, this coverage may not be necessary. Determine what will be covered by the medical insurance. With this information in hand, you can determine whether or not the policy is necessary and how much you should purchase.

Emergency road service add-on may only be purchased if you have comprehensive or collision insurance. Be sure to carefully review the policy to see what will and will not be covered. If you have this type of protection through another provider, you will find this coverage is unnecessary.

Custom parts and/or equipment protection is an important type of coverage. This may include anything from roll bars, custom wheels, a paint job or stereo parts. They are not covered under your regular coverage so you may wish to purchase additional protection in order to avoid a loss if an accident does occur. Look at a great car insurance quote by entering in your ZIP code!

Making the Final Decision

Your personal situation plays a role in how much coverage you should purchase. Talk to your insurer or use an online insurance calculator to determine how much coverage you need. This is one area you should not skimp on as an accident could result in financial disaster for you and your family. If you’re interested in checking out car insurance, use our FREE search tool to receive car insurance quotes!

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