How Much Car Insurance Do I Need?

Having the right amount of car insurance does three things: it meets the legal requirements of your state, it fits your personal needs, and finally, it matches your unique financial situation. The right amount of coverage shouldn't be a burden on your budget. Here, we'll walk you through how much car insurance you may need and show you how we can help.

The right amount of car insurance...

Meets state minimum requirements

If you're wondering how much auto insurance you need for your car, start with your state's legal requirements. State minimum car insurance generally includes:

  • Bodily Injury Liability: Pays for another person's medical or funeral expenses (not yours) if you cause a car accident.
  • Property Damage Liability: Pays to repair or replace another person's property (not yours) if you're responsible for a car accident.
  • Personal Injury Protection: Helps pay for bodily injuries that you and your passengers incur in an accident, regardless of who is at fault. Varies by state.
  • Uninsured Motorist Coverage: Pays for your expenses if you're hit by an uninsured or underinsured driver. Varies by state.

Why bother meeting your state's insurance requirements? Because driving without the right amount of insurance could lead to some hefty penalties. Your driver's license and vehicle registration could be suspended. You could be required to carry an SR22. You could have to pay a fine and even spend time in jail. The list of headaches goes on and on. Driving with at least the minimum amount of car insurance is the best way to avoid such consequences.  

Talk with your local Direct Auto & Life Insurance agent about meeting your state's insurance requirements. Then let's go from there!

Meets your personal needs

Once you've met your state's legal requirements, any additional car insurance coverage will depend on your personal needs.

Is your car leased or financed? In addition to liability car insurance, your lender or leasing company will require that you purchase comprehensive and collision coverage. That's why we ask the question, "Do you make payments on this vehicle?" during your auto insurance quote. When you answer "Yes," we’ll include comprehensive and collision in your quote.

Got any teen drivers in the household? A teen driver might be another reason to add comprehensive and collision to your auto policy. These two coverages help pay to repair or replace your vehicle after an accident or run-in with something other than a car, like a light post. Teen drivers have the highest crash risk per mile traveled, notes the IIHS, so anything you can do to help prepare for the worst could help you save money in the future.

Do you spend a lot of time on the road? If you drive hundreds of miles each week, you might want to consider going beyond your state's coverage requirements and including additional services like Roadside Assistance or an Emergency Protection Plan. The more time you spend on the road, the more likely something could go wrong. These plans can come to your rescue when you get a flat tire or need to spend time in the hospital after a car accident.

Is your car older? If your vehicle is so old (or has so many miles on it) that you probably wouldn't repair it in the event of an accident, then you might not need comprehensive and collision coverage. Minimum auto insurance could be right for you.

Matches your financial situation

Now you're probably wondering: How much will all of this cost me? As we mentioned before, the right amount of car insurance shouldn't feel like a burden on your budget.

If you're looking for ways to cut back on your overall car expenses, going with minimum auto insurance (as opposed to a policy that includes optional coverages) could help. Picking a high deductible will also help. Generally, the higher your deductible, the lower your premium will be.

The trade-off, however, is that you'll have to pay more money out-of-pocket in the event of a car accident. But, in the meantime, you'll be paying less for your premium.

Think about the amount of cash you might have on hand in the event of an accident. How much would you be able to pay to have your car repaired or to buy a new car, while keeping your other expenses in check? If you think you have a large enough cash cushion to handle that kind of spending, then a higher deductible, a lower premium, and less coverage might be worth it for you.

Let's talk car insurance

Minimum auto insurance is required by law. Beyond that, how much car insurance you buy is mostly up to you. Call 1-877-GO-DIRECT (1-877-463-4732) or come in for personalized attention from a Direct Auto & Life Insurance agent. We'll help you meet your state's minimum insurance requirements and put together the best car insurance policy for your needs.  

The information provided herein is designed to give helpful advice on the topic discussed. It is not intended to provide legal or any other type of advice and is not meant to be a thorough discussion of every issue that a person should consider or may encounter. We are not responsible or liable for the availability of links to websites or resources, or for any content, advertising, products, services or other materials on or available through these websites or resources or your reliance thereon. Any references to third party rates or products are subject to change without notice. Roadside Assistance and Emergency Protection Plans are not insurance and do not meet any financial responsibility law. They are administered by NationSafeDriver, Boca Raton, FL. Trademarks are property of their respective owners.

How Much Car Insurance Do I Need