How To Know If You Have Enough Auto Insurance

How to Know if You Have Enough Auto Insurance

Do you feel that you may be spending too much, or conversely, too little on your auto insurance? Would you like to have a better idea of where you stand when it comes to coverage? According to the NHTS (National Highway of Transportation and Safety), there were approximately 5 million eight hundred and eleven thousand reported auto accidents in 2008.

With an estimated US population of around 307,006,550, that’s one traffic accident for every 52.3 people in America. When you consider that most traffic accidents involve two or more people, the risk of having an accident of your own gets even higher. If you don’t know if you have been getting enough auto insurance to provide adequate coverage, then it’s time to find out. This article will explain the different types of mandatory and extra auto insurance coverage and give you a good idea of what constitutes "enough auto insurance" so that you’ll be covered when you need it most.

Bodily Injury Liability

Bodily injury liability coverage is mandatory in most states. This auto insurance coverage pays for injury done to the driver of the other cars and any passengers in either your car or the other car. Bodily injury liability is not something that you want to skimp on. The reason is because it protects you from lawsuits that can arise from accidents, whether you are at fault or not.

So how much bodily injury liability coverage do you need? This coverage is sold with specific limits per person and per accident. So, if you purchase this type of auto insurance at $50,000/100,000 then the insurance pays up to 50,000 per person and up to 100,000 per accident. The key is to cover your assets. The more that you make and the more wealth that you have, the more of this type of auto insurance you need to buy. Skimping could mean losing your assets with one accident, so be wise and protect yourself.

Personal Injury Protection

Personal injury protection auto insurance, or PIP, covers medical costs from an accident for yourself and your loved ones. It can also cover your funeral costs should you perish in an automobile accident. Typically, you can pay less and get a lower amount of coverage if you already have health and life insurance policies that will provide medical and funeral costs. If you do not have separate health insurance and life insurance, then go ahead and pay the necessary amount for PIP to cover those costs.

Property Damage Liability

Property damage liability pays for the vehicle of the other driver. Some states have special required minimums that you must purchase. You may opt to only purchase the minimum amount of property damage liability coverage as directed by your home state. However, remember that there are tons of luxury cars out on the roads today. If you crash into a Porsche 911 or some other pricey luxury car, your finances could end up in a world of hurt if you only purchased minimum coverage. It’s probably only going to cost you a little more each month to protect yourself against paying to replace someone’s Aston Martin out of pocket.

Collision Insurance

Collision insurance is what pays for the replacement or the repairs on your car when you have an accident. You will have to have this coverage if you are financing a car. You select a deductible, which is how much you are going to pay before insurance kicks in. The lower your deductible, the more you’ll have to pay each month. Collision insurance can make up a large portion of your total monthly auto insurance, making most people see it as a great way to lower costs by hiking up that premium. Just remember that you need to have enough money on hand to pay your deductible whatever it is. If your car is very old, then you may consider dropping this coverage.


Comprehensive auto insurance protects you against damages from events such as natural disasters, theft, and vandalism. It works the same as Collision insurance-the lower the deductible the more you pay. Comprehensive coverage may cost more in areas that are high in crime. Again, choose your deductible wisely so that you will be able to either pay or have insurance pay if your car sustains damage from a hurricane or a vandal.

Uninsured Motorist

Uninsured motorist coverage protects you from drivers who don’t have enough auto insurance. It covers medical and funeral costs. Uninsured motorist coverage also covers you if you are the victim of a hit and run or are hit by a car while walking or on a bike. Unfortunately, uninsured motorist are everywhere and are high in numbers. Too bad you can’t trust people to follow the law and only drive when they have insurance on the vehicle that they are driving. Protect yourself from people like this by purchasing uninsured motorist coverage and you won’t have to worry if someone with no coverage hits you.

Remember, the point of getting enough auto insurance is to protect you, your loved ones, and your assets in the event of an automobile accident. Yes, sometimes it’s annoying to feel as if you are throwing money away every month for no reason. But consider this, you can shop around and find an insurance plan that covers a family of two with two newer vehicles for around $150-200 per month. That’s $2,400 per year tops. Now, considering that AAA reports that car accidents costs Americans $164.2 billion per year, and that one accident could set you back tens of thousands of dollars, good auto insurance is well worth the price that you pay in.