How much car insurance do I need?

You should probably think about getting more car insurance than the state minimum.

So, you know you have to get car insurance so that you’re not breaking the law or something like that. From all the fuss people make over it, you’re guessing it’s kind of important. But how much car insurance do you need to get? We’ll explain.

What is the state minimum for car insurance?

Each state requires people who live there to have a certain amount of auto insurance. They’re not being bossy – it’s all for a good reason. Most states, however, only require liability insurance. (That’s the coverage that will cover expenses you owe to the other driver if you crash into them – their medical bills, their car repairs.) It can also help cover your legal expenses if they sue.

However, most states don’t actually make people get that much car insurance to be able to drive legally. The state minimum is for real a minimum – it’s basically bare-bones coverage. And the bare bones coverage might not be enough to fully protect you from the expenses of a serious accident after you tally up the medical bills of the other driver and the potential fallout from a lawsuit. What seems like a lot of insurance at first glance can quickly become not enough insurance.

Moral of the story: Seriously consider choosing higher limits of insurance than your state mandates.

Other coverages.

Since many states don’t require coverages like collision and comprehensive insurance, you might not be protecting your own car if you only get the state minimum insurance. (Collision insurance can help you repair your car if it’s damaged in an accident or by a collision. Comprehensive coverage helps cover fire, theft, vandalism, falling objects, and animal strikes.) There are scads of other coverages to consider, too, like rental reimbursement and uninsured/underinsured motorist.

(Keep in mind that if you have a car payment, your lender may require you to carry collision and comprehensive coverage.)

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