Car insurance can be a major headache. There are a lot of factors to consider when figuring out how much coverage you need. Of course, there are state requirements drivers must meet, but generally it’s best to get more than the bare minimum. Read on to find out how to select the level of insurance that’s right for you.
The first thing you need to know is that there are different types of policies that make up your overall auto insurance. These include:
This is where the factors come into play: If you owe money on your car, your lender requires you to carry comprehensive and collision coverage. However, if you have a very old vehicle that doesn’t have much value, you can probably get away with simply having collision coverage.
Minimum Insurance Coverage Levels
Almost every state has minimum requirements for car insurance. For example, California’s minimum coverage requirements (at the time this was written) are 15,000/30,000/5,000. These numbers stand for the following, respectively:
These numbers are what allow you to legally drive, but they’re not necessarily enough if you get involved in a car accident. If costs exceed your coverage limits, you’re responsible for paying the rest, and that can get expensive. If you have assets like a home, savings, etc., you’ll want to consider getting covered for an amount equal to these.
If you want to keep your premium low, choose collision coverage with a high deductible; this way you pay less each month. It’s great to have coverage to fall back on if you end up in an accident, but you don’t want to pay too much for something you may never use.
The Bottom Line
When it comes down to it, you need to at least meet your state’s requirements for car insurance, but each situation is unique. Shop around when you are buying car insurance, and be sure all of your own requirements are met before you choose a provider.
About the Author:
Kelly Larsen is a copywriter for I DRIVE SAFELY, the nation’s number one provider of online traffic school and driver’s education. With over 10 years’ experience in the field of safe driving, I DRIVE SAFELY has provided exceptional online courses to millions of new drivers, drivers looking to handle a traffic ticket and clear their driving record, or drivers looking to save money on auto insurance. To find out more or sign up, please visit idrivesafely.com.