Insurance Blogs

Here are the basic steps to help you figure out how much auto insurance you really need to have. Knowing these things will help you find the best policy for the lowest cost. Saving money on the best coverage for you is not that difficult.

Tip number 1: Where to begin

When it comes to buying car insurance you always want to make sure you are covered well enough to cover damages but without spending too much for your policy. It is important to know however, that you can most likely save a lot of money if you shop around. You can save hundreds of dollars a year and still be adequately covered against liability claims.

When researching online I found basic coverage on two old cars ranged from $1000 to $1800 for the same coverage. That’s a savings of $800! If you are paying thousands of dollars to your current insurance company for whatever reason, including tickets or accidents, comparing rates with your current policy will save you big bucks.

Tip number 2: How much coverage do you really need?

Car insurance liability requirements will be different in some states, so if you have moved to another state since purchasing your current policy you should definitely compare quotes with other companies. Take the time to determine your state’s minimums and then find a company that will sell you a policy for less money. It’s easy to do.

When searching online for insurance it is easy to narrow it down to your state’s minimums because these online quote services ask for your zip code. By entering your zip code, you will be directed to carriers that have the best rates for your area.

Once you find out the basic minimums for your state, you can choose additional coverages that you need. If you are extremely cautious and base your risk on the worst case possibilities, your insurance company will be happy to load you up with additional coverage that you may not need, so choose your coverage carefully.

So how do you decide how much coverage to buy beyond your state’s minimum requirements?

Most experts agree that if you have a large number of assets you need to get enough liability coverage to protect them.

Let’s say for example that you have $50,000 liability coverage for bodily injury but your assets are about $100,000. An attorney may go after your assets to cover any of the other party’s medical bills that may exceed your $50,000 liability coverage.

Usually the recommended limit for liability coverage is $50,000 for bodily injury for one injured party per accident and $100,000 for all people injured in an accident. Also, recommended is $25,000 for property damage (over half the cars on the road are worth at least $25,000.

Let your financial situation help you determine if you go with the minimums or need to purchase more to cover your assets. If your assets do not exceed your liability limits then it is recommended that you not buy excess coverage.