How much car insurance do you need?

How much car insurance you need depends on many factors, including how much you drive and the worth of your vehicle. All drivers must comply with state car insurance laws and obtain at least the minimum levels of coverage. Even if your state doesn't require liability insurance, it's a good idea to have at least $500,000 worth of coverage. Scroll down to learn about additional coverage and compare free quotes for how much auto insurance 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: Oct 28, 2020

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How much car insurance you need depends on a number of factors. All drivers must comply with state car insurance laws and obtain at least minimum levels of coverage but these levels are far less sufficient than you really should have. How much additional car insurance you need depends on many factors such as:

Type and Age of the Car

Drivers of typical passenger vehicles need to understand that state car insurance laws only require liability insurance which does not cover damages to your vehicles in an accident where you were at-fault. This is very important especially if the vehicle is your primary means of transportation. In the event of an accident you want to make sure you have coverage for repairs and any medical expenses should you suffer injuries. Comprehensive and collision insurance provide coverage for your own vehicle and how much car insurance you need really depends on a combination of your budget and the price of your vehicle. Many consumers opt for $100,000 or more in coverage since the potential exposure to medical bills is quite high.

Owners of classic cars tend to focus more on specialized classic car insurance coverage which protects their investment including an agreed upon replacement value. Although classic car owners still may want some form of liability and comprehensive insurance (many states do not require classic cars to carry insurance) the amount of time spent driving the vehicle is usually very low so some drivers opt for lower levels of insurance and focus more on coverage that protects the value of the vehicle. However it’s key to remember no matter what vehicle you are driving the same liability exists in the event of a car accident. A judge will certainly not award less money to an injured victim based on the car you drive.

Your Financial Resources

How well off financially you are also plays a role. On one hand the more personal assets you have the more likely you can pay for damages yourself but on the other hand why risk your personal assets? If you can afford car insurance coverage with policy limits exceeding $100,000 or more its almost always worth the small additional cost.

Value of the Vehicle

Older cars have much less value than newer cars so some drivers opt for just liability insurance and medical expenses in return for lower car insurance premiums. This is common for owners of older cars which generally have little value and where any major damage would simply cause the vehicle to be declared a total loss anyway.

Newer cars however really need a good insurance policy and for owners who have a late model car financed its especially important to understand GAP insurance since any total loss accident in the first few years of ownership can often lead to a GAP between the book value and the balance of your car loan. Without GAP insurance you can incur a large debt but with the right GAP car insurance policy the difference between your reimbursement check from the insurance company and your car loan balance will be covered.

Who is driving the car?

Anytime a young driver is added to a family policy you really need to review your car insurance coverage. While its may seem reasonable enough to have some kind of lower coverage based on your needs young drivers need as much coverage as you can purchase as car accident rates are highest in this group.

Car insurance companies offer a range of coverage options and how much car insurance you need will depend on your unique profile. Try to find a balance between affordable premiums, policy coverage and a reliable provider.

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