It is a familiar question that first-time vehicle owners ask: how much car insurance do I need? In the United States, auto insurance refers to various policies that protect a car owner in various ways. For you to know the amount of car insurance you need, you have to understand first how each policy works.
Types of Car Insurance
Liability coverage pertains to policies that pay for liabilities and medical expenses when you are the one who is at fault in an accident. Bodily injury liability, meanwhile, will pay for the medical expenses of pedestrians or motorists who were injured in an accident in which you were at fault. Property damage liability will be used to cover any damage to a vehicle that your car collided against.
There are also policies which protect you and your car in case of a collision. Personal injury protection secures you and your passengers against any medical expense that may be needed as a result of a car accident. Collision policy covers repairs needed by your car after a crash. When you have comprehensive coverage, then your insurer will replace your car in case it gets stolen.
How Much You Need
With the various car insurance policies offered in the market, it is easy to get confused. Naturally you’d ask ‘how much car insurance do I need?’ The answer may depend on several factors like your budget and the other insurance policies you have. For instance, you may not need to invest on personal injury protection if you have health and disability insurance provided by your employer. In case the state you are in requires you to have one, then just buy the required minimum.
It would be wise to invest on collision and comprehensive insurance policies, however. This should protect you against theft or against expensive repairs to any damage that your car may have gained from a collision.
Some states also require drivers to have a no-fault insurance. This policy pays out for expenses in collisions regardless of which motorist is at fault. These states include Kansas, Kentucky, Michigan, Massachusetts, New Jersey, New York, Utah and Pennsylvania.
The answer to your question ‘how much car insurance do I need?’ depends on your budget and state requirements, but you will have peace of mind if you invest on collision and comprehensive insurance.