Auto insurance can be broken down into three main types: vehicle, liability, and medical coverages. While you'll want to carry the minimum as required by state law, you'll also want to carefully consider the value of your car as well as additional coverages to protect yourself, your passengers, and your assets from accidents. When determining how much coverage you'll need, make sure you're covered for an amount equal to the total amount of your assets. Additionally, if you lease or have a lien on your vehicle, your lender may require for you to carry both comprehensive and collision coverages.
The following coverage packages are not specific coverage packages offered by carriers, rather, they illustrate common package types. This is more of a broad overview of what insurance carriers offer.
Keep in mind, you can mix and match coverages depending on your carrier and your specific needs. While you might want minimal coverages for your vehicle, you might want the maximum coverage for liability. Similarly, the health insurance you carry might factor into what choices you'll make when selecting personal injury protection (PIP).
Insurance carriers can be flexible and offer a wide range of products. We recommend speaking with agents to better dial in what you're looking for and tailor a policy that best suits your needs.
This is the state required minimum coverage. Experts advise protecting your assets by purchasing more coverage than the state-mandated minimums, as these limits tend not to keep pace with the ever-increasing costs of car repair and medical bills. For example, repair of modern bumpers with motion sensors can cost upwards of $5,000. In some states, the minimum liability amount is only $5,000. Any damages over that amount could cost you out-of-pocket. We recommend purchasing more coverage, but if the state minimum is all you can afford and you don't have any savings or assets, this coverage level may suffice.
Consider this level of coverage if your car is valued under $10,000 and you can afford to pay out of pocket for repair, but you want higher liability and medical coverages to protect your assets. We recommend at least $25,000 for Property Damage, $50,000/$100,000 Bodily Injury, and $50,000/$100,000 for Under/Uninsured Motorists.
This level of coverage is purchased most often. It includes both collision, comprehensive, and higher amounts of liability and medical coverage. Generally, consumers choose $50,000 worth of Property Damage, $100,000/$300,000 Bodily Injury, and $250,000/$500,000 Under/Uninsured Motorist.
This level of coverage is a good choice if you have a lot of assets. While it will include both collision and comprehensive coverages for auto repair, it will generally have the highest level of liability and medical coverages available. Typically, $100,000 Property Damage, $250,000/$500,00 Bodily Injury, $250,000/$500,00 Under/Uninsured Motorist.
As previously stated, these coverages are indicative of packages that are common amongst consumers, but by no means are these examples exhaustive or restrictive of what you can purchase. Now that you have an overview of what's available, you can shop around and begin to get a sense of how carriers compare to one another for similar coverages.
From there, you can begin to compare differing products and discounts that each carrier offers. Not all carriers are the same, and to be competitive, they offer widely different products and policies. Take advantage of this.
For example, some carriers offer accident forgiveness, while others do not. Some carriers offer multiple products like renters, life, and homeowners insurance, which offers bundling opportunities.
Some carriers offer discounts that others do not. You might be interested in a low-mileage discount. You might qualify for a good student discount, a military discount, or a safe-driving discount. Some carriers offer discounts for anti-theft devices or if you use an electronic funds transfer to pay your premium.
It helps to shop around and compare quotes amongst carriers. There is no one-size-fits-all approach. You may want to speak with an independent agent, as well. They're knowledgeable of the industry and they understand what the multitude of carriers offer and their philosophies. An independent agent can help set you up with a carrier that's the best fit for you.