How Much Insurance Do I Need Anyway?

With unemployment high and finances rough, many people are trying to save money any way they can. One thing you pay each month or quarter is your auto insurance–and I’m sure you’ve considered trying to save money on this. However, the insurance you have is there for a reason. Just because you could lower your monthly payment does not mean that is a good idea. To understand exactly how much auto insurance you need, take a look at this breakdown of different types of coverage that come together to create your insurance policy.

  • Liability Coverage – This helps cover your liability and expenses for when you are involved in an at-fault accident. This money goes to the other driver, and does not cover your vehicle or those riding in your vehicle. There are two sub-types of liability coverage.
    • Bodily Injury Liability (BIL) – This pays the medical expenses of those insured in an at-fault crash. There is normally a state mandated minimum you must carry in BIL.
    • Property Damage Liability – This portion of the policy pays for damage to another car when you are involved in an accident that is your fault.
  • Personal Injury Protection – This insurance covers the medical expenses and possibly lost wages of you and your passengers after an accident.
  • Collision Insurance – This pays for repairs or possibly replacement of your vehicle after an accident.
  • Uninsured or Underinsured Motorist Coverage – This is an additional type of insurance that protects you if you are hit by someone that does not have insurance or does not have enough insurance to cover your repairs.
  • Comprehensive Coverage – This insurance will cover you if your car is stolen or damaged in some way outside of an accident.

Now that you know about the different types of insurance available to you, deciding how much you need is a bit simpler. It is important you know what is required by law, or required by your lienholder, if you do not own the car outright.

One of the best ways to understand these requirements as well as decide what your personal needs are is by speaking with a trained insurance agent. While you can purchase insurance from the web yourself, talking with an expert, like one of the team members of Greenwood Insurance Group, is often the best way to get an idea of your policy needs. Ideally, your agent will work with you and help create a policy that is both affordable and keeps you adequately covered.

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