How to Decide How Much Auto Insurance You Need

When it comes to auto insurance, coverage is essential. Having too much coverage can result in big financial mistakes to your wallet. By knowing how much auto insurance you need for your personal lifestyle, you will be able to rest assured that you are adequately covered without overpaying.

State Regulations on Auto Insurance

Auto insurance regulations can vary from state to state but there are two types of coverage that are required across the board, regardless of what state you live in: property damage liability and bodily injury liability. Property damage liability protects you from liability for any damage you cause to another’s property and bodily injury liability protects you from being sued for injuring another person in a car accident.  If you are financing your car there are two other mandatory types of car insurance: collision and comprehensive.  Collision covers repairs to your car after an accident regardless of who was at fault and comprehensive covers nearly anything else that could damage your car. Your car financier will include the cost of these types of coverage in your car payments.

Check Your Current Auto Insurance Policy

Aside from mandatory coverage, you can choose to be covered for things that are not required.  Recommended types of coverage that you may or may not want to include in your auto insurance policy are:

  • Personal-injury protection (PIP) which would cover your personal medical bills and possibly lost wages if you are involved in an accident
  • Underinsured and uninsured motorist coverage to protect you in the case of being hit by an uninsured driver or a driver whose car insurance does not cover the damage you incur
  • Towing service or rental car coverage covers the costs of towing your car to a garage and helps you pay for a rental car while your car is out of service

These non-mandatory types of insurance are recommended for a reason: they can help you avoid a bad financial situation, so be sure to think it through carefully before canceling any coverage.

Get Discounts to Maximize Coverage for the Lowest Prices

There are ways to maximize your coverage and save money. Discounts are available if you qualify for them and you can rest assured that you are appropriately covered while not having to worry about how you’ll make your car insurance payments.  Discounts for car insurance are everywhere; they can be based on:

  • Where you live
  • What kind of car you drive
  • What profession you work in
  • Your personal driving record
  • How many cars you insure through the same company
  • Your teenager’s grades in school
  • Where you park your car at home
  • If you have any anti-theft devices installed

Comparative Negligence

"Comparative negligence" is a term that is used in legal defense cases when determining how much of the fault goes to the plaintiff in a case. The jury or the judge in the case has to determine how much of the fault goes to the individual who is bringing suit against someone else. In many cases, if the plaintiff had acted differently in the situation, much of the damage could have been avoided. This defense is used to limit the amount of damages that will have to be paid by a defendant in a case.

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