Compare Car Insurance Coverage: How Much Do You Really Need?

August 29, 2010

Car insurance coverage can be customized to fit your life. But, how much auto insurance are you required to have? While individual auto insurance requirements vary from state to state, there are a few coverages that are required in nearly all.

Required auto insurance: Liability
auto insurance protects you in the event that you are at fault for causing an accident, whether with another car or an object like a fence. The policy covers bodily injury and property damage for other motorists and passengers. Liability auto insurance is required in all states except Wisconsin and New Hampshire. Where required, minimum coverage amounts vary from state to state.

Liability auto insurance is represented by three numbers. For example, 50/100/25 is a fairly standard liability policy. The first number is the maximum amount in thousands your insurance company will pay per person for bodily injuries sustained by victims of a car accident in which you are at fault. The middle number is the total maximum amount in thousands that your car insurance company will cover for bodily injuries to victims of a car accident. For example, if three people are injured, and two people require $50,000 you would be personally responsible for the third person’s medical expenses. The last number is the amount in thousands that your insurance company will pay for damage that you cause to property that is not your own.

Other possible required auto insurance
Some states require other auto insurance policies in addition to liability. One policy is referred to as Personal Injury Protection, or PIP. This coverage pays medical expenses for you and your passengers, lost wages and any other expenses that are incurred due to bodily injuries that are the result of an accident in which you are at fault.


type of car insurance coverage that may be required is uninsured or underinsured motorist coverage. If you are involved in an accident with a driver who does not carry insurance, or carries insufficient coverage, your insurance company will cover the expenses so that you are not responsible.


car insurance coverage options that may be required by your state are collision and comprehensive.  Collision covers costs for damages incurred due to colliding with a car or another object. Comprehensive pays for damages or losses to your vehicle caused by something other than  a collision, for example natural disasters, animals, theft or vandalism.

Establishing required auto insurance limits
it’s time to decide your car insurance coverage, experts suggest purchasing as much as you can comfortably afford. Auto repairs and medical expenses can be very costly. Paying a higher premium now means that more accident-related expenses will be covered by your car insurance policy. 

Now that you know which types of auto insurance may be required in your state, consider contacting at least three reputable insurance companies to compare car insurance quotes and determine the best options for you.

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