four Questions You Ought to Ask To Discover Out How A lot Auto Insurance You Want – MarketWatch

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If one of your 2022 resolutions is to get your finances in order, it is a good idea to check out what types of insurance you have, including auto insurance. In fact, some of us may not have the correct amount of auto insurance. Too little, and an accident could cause great financial damage; too much and you can only waste money. Here is a guide to help you figure out exactly how much auto insurance you need personally, and you can compare different auto insurance rates here.

Do you have the minimum vehicle insurance required by your state and more?

Drivers need at least the minimum insurance amount required by their state
– and most need more than that, says Les Masterson, insurance analyst and managing editor at Most states generally require personal and property damage liability insurance, around half require some type of uninsured / underinsured motorist insurance, and more than a dozen require personal protection coverage, for example. "Government regulations usually don't provide the protection you need," added Masterson.

As a rough rule of thumb, auto insurance experts recommend liability insurance of at least 100/300/100 – d. "This level of auto insurance is considered fully comprehensive, and this extended liability coverage can give you more protection in the event of an accident," says Masterson. And when you have significant assets, you may want more, says Janet Ruiz, director of strategic communications at Insurance Information Institute. "Liability coverage for auto insurance is often up to $ 500,000," says Masterson. You may also want other types of insurance, which we discuss in the next section.

Do you have the right insurance?

Understanding the specific types of insurance can also help you determine the policy that makes the most sense for you. In this section, we'll break down the main types of insurance and roughly estimate how many experts recommend each one. Use a calculator like this one from to figure out exactly how much you might need personally.

With so many types of auto insurance, figuring out which plans make the most sense and how much you will need from each one can be difficult. Some of the most common ones include liability insurance, which covers other people's injuries or property damage in the event of a car accident, and uninsured motorist insurance, which pays your medical bills if someone with no or inadequate insurance collides with you and you or your car and sustains car injuries. New or leased cars may require collision and fully comprehensive insurance that covers a range of issues such as theft, vandalism and natural disasters.

What is it

Who should have it?

How much experts recommend

Personal injury liability per person

Helps pay someone else's expenses if you injure them in an accident

All drivers

At least $ 100,000

Personal injury liability per accident

If you cause a car accident in which several people are injured, this coverage covers their combined costs

All drivers

At least $ 300,000

Property damage liability per accident

Helps repair damage to someone else's vehicle or property

All drivers

About $ 50,000

Uninsured / underinsured motorist protection

Helps you pay for damage caused by a driver who is not or insufficiently insured

Even if your state doesn't require it, having it is often a good idea, experts say.

Approximately $ 25,000 per person or $ 50,000 per accident

Personal Protection (PIP)

Covers no-fault medical expenses

Mandatory in certain states and often recommended in states where it is not required

At least $ 10,000


Pays the repair costs for your vehicle if it is hit by another vehicle

Some lenders require this when leasing or financing a new car; If you have an older car that isn't worth much, you might not need it

Depending on the insured vehicle


Pays to repair or replace your vehicle if it is stolen or damaged in a non-collision accident

The ones with newer or nicer cars

Depending on the insured vehicle

Auto insurance companies also typically offer optional coverage options such as rental car insurance, gap insurance, and roadside assistance. If your car breaks down or you have an accident and your car is in the workshop, rental car insurance covers the cost of a rental car for the days when your car is not ready to drive. Typically, you can rent a car up to a certain amount of dollars and the cost of the car will be reimbursed by the insurance company. Gap insurance will help you pay off your loan if your car is totaled or stolen and you owe more than the car's value, but this type of coverage is only available if you are the original borrower or lessee of a new vehicle are.

If all of this seems very expensive to you, remember: a higher deductible can lower the premium. “The deductible is what you have to pay when you report a claim and the insurance covers the rest of the damage. If your car takes $ 2,000 in damage and you have a $ 500 deductible, your insurance company will give you $ 1,500 for the damage, ”says Masterson. However, Masterson cautions, “Make sure you choose a deductible that you can afford if you need to make a claim. It's a good idea to put this money aside in case you need it for a future claim. ”This is where you can compare different car insurance rates.

What kind of car do you have

A brand new car needs different levels of insurance than the bat your mom gave you. When you have a shiny new whip, comprehensive coverage can help pay for your car to be repaired or replaced if it is stolen or damaged by vandalism, natural disasters, or even fire and flood.

And when it comes to a new car, says Janet Ruiz, director of strategic communications at Insurance Information Institute, you may also want a void "that replaces a 3-year-old or newer vehicle with a new car when your car is totally lost."

In the case of older cars that are not worth a lot of money, it can be advisable to forego fully comprehensive and collision insurance, as the policy does not pay more than the car is worth in the event of a loss or accident.

If you lease a car, you will likely need fully comprehensive insurance, which includes fully comprehensive and fully comprehensive insurance, as well as the required third party liability.

Do you have a lot of wealth?

If you need even more coverage, umbrella policies are available, and depending on the umbrella policy, you can get over $ 1 million in coverage. If you cause an accident and reach the limits of your policy, an umbrella policy can help cover the remaining costs. It is best for those who have large assets such as real estate or significant savings.

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