Often people ask what is the lowest level of car insurance coverage you would need. It is important to understand the real meaning of this question because what you need is totally different than what is required by your state. People should buy at least enough liability auto insurance to pay for damages and injuries they may cause.
This is really crucial for your financial future and peace of mind. If you don’t have enough car insurance coverage for the damages you caused you will have to sell whatever you own and make the shortfall. And if you don’t have anything to your name how are you going to live with yourself knowing people suffer because of you and there is nothing you can do about it.
So, What Is the Minimum Auto Insurance Cover You Need?
The figures of $100,000/$300,000/$100,000 is the general concession accepted by many experts to be the minimum auto insurance coverage you should buy to cover your bases. It breaks down as $100,000 for a single injury claim, $300,000 for maximum injury payout and $100,000 damages claims. Of course, it isn’t a bullet proof figure by any means since a single car can cost half a million dollars and one simple surgical procedure can cost hundred thousand dollars. But since you are asking the minimum coverage you need (and not must have for legal reasons) this is what you should buy as minimum.
It is totally up to you if you want to buy comprehensive and collision coverage for your own automobile as well. If you could afford to buy a car once you can probably afford to buy another if worse happens. So, with your own vehicle the maximum you can lose is the price it would fetch in the open market. In other words, there is a known upper limit to what you can lose. With liabilities, there is no such limits to the damages that can total up, say in case of a highway pile up or causing a train to derail.
That is why you should buy as much liability vehicle insurance as you can afford. Basic liability limits set by each state is absolute minimum. Companies cannot sell policies with lower coverage than that and people cannot buy. It is explained here under the heading of buying more than minimum auto insurance coverage. It is well advised that people should buy a lot more coverage.
Most people would buy much larger coverage. Over 70% of motorists are not interested in the bare basic but what is satisfactory. They buy at least collision, comprehensive and uninsured motorists coverage as well to be properly protected in case of accidents. They want their own losses to be covered as well as third party claims.
Also, the costs don’t go up a lot when you increase coverage. Increasing automobile insurance liability cover several holds doesn’t push up your premium that much as explained in that post.
Many brokers and agents wouldn’t just agree to selling basic vehicle insurance coverage without talking to the customer about the risks they are running. Many brokerage firms may actually refuse to sell basic cover. Furthermore, policies are generally sold as packages in today’s market place. Most packages comes with substantially larger liabilities cover as well as Collision, Comprehensive and Uninsured Motorists Coverage.
What Is the State Minimum Car Insurance Requirements?
This is a totally different question than the first one. Here people are mainly concerned with complying with state laws. They don’t want to be in trouble when they get caught without automobile insurance. You can find out your state vehicle insurance requirements by finding your state in the list. It is understandable to buy the minimum coverage enforced by your state if you are finding it hard to pay for even the lowest auto insurance premium.
To sum it up, basics are there to protect the public from motorists who are not keen to buy insurance or pay for it. It is never the guidance for how much car insurance you should buy.