Home Auto Insurance How Much Car Insurance Coverage Should I Buy?

How Much Car Insurance Coverage Should I Buy?


Car insurance costs and coverage can look quite different from person to person. Depending on where you live, your age, and your driving history; more or less insurance may be suitable. Here we’ll look at:

  • What is auto insurance?
  • How does car insurance protect me?
  • How much car insurance should I buy?
  • Can I get away with less car insurance?
  • Where can I buy car insurance?

What is Auto Insurance?

Auto insurance is an insurance policy where the insured pays monthly premiums for protection from costs associated with a car accident or other auto-related items. The insurance company will pay for things like collision repairs, personal injury, liability, medical expenses, towing, and more (depending on the insured person’s individual auto policy).
There are loads of different car insurance companies to choose from but depending on your situation some will be better than others. Costs can vary greatly from one insurance company to another for the same level of coverage in the same location for the same person. So, it’s smart to shop around for car insurance to be sure you’re getting the best deal.

Car insurance is also legally required by 48 out of the 50 states, and the 2 states who don’t require it (New Hampshire & Virginia) have other similar liability insurance costs which are essentially car insurance anyways. So, one way or another car insurance is a requirement to legally operate a vehicle in the United States.

How Does Car Insurance Protect Me?

Auto insurance provides protection against financial loss in the event of theft or a car accident. You pay a monthly premium, and the insurance company agrees to cover losses or costs laid out in your policy. Car insurance covers:

  • Liability: your legal responsibility to others for bodily harm or damage from an accident.
  • Property: theft or damage of your vehicle
  • Medical: costs of treatment, rehabilitation, and occasionally lost wages or funeral expenses following an accident.

Pretty much anything that happens due to a car accident is covered by insurance.

How Much Car Insurance Should I Buy?

How much car insurance coverage you need will be based on varying factors including your budget, how often you drive, how far you drive per year, your vehicle’s mileage, your vehicle’s value, where you live, and more.

Your age and where you live will be a major determining factor as to how much car insurance you need to buy because there are state-level requirements. So, the short answer is:

You need the legal minimum of car insurance to drive your vehicle legally.

But this can vary greatly from state to state. Knowing the legal limits for your state will be important when shopping for car insurance as these are levels of coverage you cannot reduce. They are state minimums that you must purchase in order to drive your vehicle legally.
Most drivers though will need more than the state minimums for car insurance.

  • How much do you drive a year?
  • Are you in a high traffic volume area?
  • How many miles do you drive a day?
  • Do you have a history of accidents?
  • What deductible can you afford if you need to file a claim?

Your budget will be a big determining factor in how much insurance to buy. If you cannot afford a deductible of $2000, you’ll want to pay more per month in order to reduce your deductible level. If you want a lower monthly payment it means you’ll have a higher deductible should you need to file a claim.

Can I Get Away with Less Car Insurance?

The short answer is “yes”, but it isn’t that simple. You can get away with less, sure, but what about if an accident happens? If you can’t pay your deductible for collision coverage, your level of car insurance isn’t high enough.

Do you have any assets? This is a very important question because if you have assets (home, boat, investments, 401k’s, etc.) and your level of car insurance won’t cover the repairs or medical expenses of the other party involved when it was your fault, the individual can file a suit for damages and come after your assets. They can do this because your car insurance coverage level was not enough to cover the costs associated with the accident you were in.

So, if you have assets, you’ll want a higher level of car insurance coverage to be sure your assets are not at risk following an accident. If you have assets, you want more coverage, it’s that simple.

Where Can I Buy Car Insurance?

There are lots of different places you can find suitable car insurance coverage and it is a good idea to get quotes from a few different companies. To get a quote for free right now in seconds:

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