How Much Car Insurance Do You Really Need

Buying the right amount of car insurance is about matching risk to budget. This guide explains the key coverages and a simple method to choose limits that fit your life today.

Know the Core Coverages

• Liability pays for injuries and property damage you cause to others. Every state sets a minimum amount.
• Collision pays to repair your car after a crash with another vehicle or object regardless of fault.
• Comprehensive pays for theft fire weather damage flood and animal strikes.
• Uninsured and underinsured motorist protects you when the other driver has little or no insurance.
• Personal injury protection or medical payments helps with medical bills for you and your passengers.

Why State Minimums Are Often Not Enough

State minimums keep you legal but they can run out fast after a serious crash. Hospital bills and modern vehicle repairs add up quickly. Many drivers choose limits higher than the state minimum to protect savings income and future earnings.

A Simple Method To Pick Your Limits

1. Add up what you need to protect. Include savings home equity and other assets. If you rent include your income as future earnings to protect.
2. Choose liability limits that cover that amount. Common choices are 100 300 100 or 250 500 250. Higher limits cost more but provide far stronger protection.
3. Decide on collision and comprehensive. Keep these for newer cars or cars you cannot easily replace. If your car is old and low in value you may drop them after you run the numbers.
4. Set a deductible you can afford today. Many drivers select 500 or 1000. A higher deductible lowers the premium but you pay more out of pocket after a claim.
5. Add extras that fit your life. Roadside help rental reimbursement gap for financed cars and rideshare coverage for app drivers.

Common Driver Scenarios

New car with a loan

Choose full coverage with collision and comprehensive keep deductibles at a level you can pay and add gap if the loan balance is higher than the car value.

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Discounts Offered for eligible drivers

Paid off older car

Price the premium for collision and comprehensive against the car value. If the annual cost is close to or higher than ten percent of the car value consider dropping them.

Family with a teen driver

Raise liability limits for peace of mind. Ask about good student and driver training discounts and explore telematics to reward safe driving.

Low mileage commuter or remote worker

Ask about low mileage or pay per mile programs. These often reduce the bill for drivers who travel less.

Electric vehicle owner

Confirm parts and battery coverage and check rates with several carriers since pricing can vary.

Frequent Mistakes To Avoid

• Choosing the cheapest price without matching limits and deductibles across quotes.
• Letting a policy lapse which can raise future rates.
• Forgetting to update your policy after a move new job or life event.
• Ignoring discounts for bundling safe driving defensive driving multi car or low mileage.

Quick Checklist Before You Buy

• Write down your current limits and deductibles.
• Pick target liability limits that cover your assets and income.
• Decide on collision and comprehensive based on car value and risk tolerance.
• Select a deductible you can pay today.
• Get at least three quotes with the same limits and deductibles.

Choose With Confidence

Now you know how to match protection to your budget. Compare equal quotes and pick the policy that fits your needs with no guesswork.

Compare quotes on Policy Showdown and see how your current policy stacks up.