Find out about coverage limits, collision and comprehensive insurance, deductibles and other important terms to help you decide how much is right for you and how you can save. One Frequently Asked Question: How Much Auto Insurance Do I Need? Unfortunately there is no black and white answer. It depends a lot on what coverage you need and what excess you are comfortable with. So let’s try to break it down:

How much

Liability insurance?

Liability covers the costs if you are responsible for an accident. The insurance cover extends to the vehicle and the people affected by the accident, but not to the people in your car. Most states require you to have minimum liability insurance for your vehicle. Nobody can predict exactly how much you will have to pay if you cause a crash. The key question, however, is: can you afford to cover damage that exceeds your coverage limits? The higher your liability limits, the more damage your policy will cover. To get an idea of ​​how much liability insurance you need, add up the value of your home, your car, your savings, and your investments. Then subtract your debt (what you owe). For example if the sum “Net worth” Was $ 220,000, one could consider liability of $ 250,000 for injuries per accident. If you think you need additional coverage, you can usually increase it in increments of $ 50,000 up to $ 500,000. If you think you need additional coverage, consider roof insurance.

Fully comprehensive and / or collision insurance for an old car?

Accident insurance covers repairs to your car if you have an accident. Comprehensive insurance coverage covers your car if it is stolen or damaged outside of an accident. If your car is leased or financed, you may not have a choice to get this insurance; Most lenders require you to have sufficient coverage to cover the cost of repairs to your car.

If you own the vehicle, you can consider whether the savings from crash and / or fully comprehensive insurance are enough to offset the risk of bearing the entire cost of repairing or replacing your car. For example, if your car was totaled by an accident in which the other driver was at fault and not insured, was hit in a parking lot while shopping or was stolen while hiking in a park? Do you have the option of replacing it without the help of the insurance company?

When your car is older, it may be time to give up collision and fully comprehensive insurance and invest that money in savings. You can cover the cost of collision and fully comprehensive insurance and check whether the insurance policy costs more or the same as the value of your vehicle. If so, it might be time to cancel your coverage. For example, if your car is worth $ 1,000 and your coverage is $ 500 a year plus a $ 500 deductible, you’re not really getting bang for your buck.

Be a collision and fully comprehensive deductible?

This is a balancing act. Higher deductibles generally lower your premium, but increase your expenses in the event of a claim. Ask yourself how much you are willing and able to pay directly, often at short notice, to save your premium. If you want to lower the amount you have to pay in the event of an accident, you can opt for a lower deductible.

If saving on your insurance is your motivating factor in eliminating your collision and increasing your deductible, consider these others

• Multiline: Ask your insurance company whether you can combine your household or tenant insurance with your car insurance.

• Insurance Ratings: When purchasing your vehicle, consider how the insurance company rates it. Some cars cost more to insure than others.

• Consider sharing your driving information: Programs like State Farm®’s Drive Safe & Save TM put you in control of your discount.

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