Auto Insurance Coverage: How Much You Really Need

One of the most common questions that insurance agents get is asked is how much auto insurance coverage do I really need? Every person's situation is different, so their insurance requirements will be different.

Required Coverage - Almost every state requires drivers to carry bodily injury liability insurance. The required levels will vary but in the majority of states the required coverage is never enough if a serious accident were to happen. If the minimum coverage levels do not cover the medical claims, the victim's lawyer will most likely go after your personal assets.

Bodily Injury - Most insurance experts recommend you carry 100/300 of bodily injury insurance. This means that you are covered for $100,000 per person and $300,000 for all people in the accident vehicle. These levels should cover the damages for most accidents.

Personal Injury Protection - PIP covers the cost of your medical expenses in an accident. This type of insurance is a must have. A long hospital stay can quickly bankrupt most people. If you have great health insurance you can get away with the bare minimum, but if you don't have health insurance or have very low limits on your health insurance, PIP can be a lifesaver.

Collision - This insurance covers the damage to your vehicle in an accident. The levels of coverage vary on the value of your car. If you have an older, low value car it might be best to drop this coverage. If you are driving a newer vehicle, it's best to set your limits at the replacement cost of the vehicle.

Comprehensive - If your car gets stolen, gets hit by a rock or is involved in flood or fire, then auto insurance comprehensive coverage is the type you want. Again, if you drive an older vehicle it may not be worth it. If you are leasing a car, comprehensive will most likely be required by the lessor. If you carry comprehensive, the limits should cover the replacement value of the car.

Uninsured Motorist - Your need for this will depend on where you live. If you live in a no-fault state, there is no need for uninsured motorist insurance. If you reside in a tort state, carrying uninsured motorist coverage is a good idea. The rate of uninsured drivers is climbing as more and more people lose their jobs.