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Car Auto Insurance

It's My Car Car Auto Insurance

How Much Car Insurance Do You Need?

Byadmin

Apr 21, 2023 #car, #insurance

Because almost every state requires you to own auto insurance to drive, you might assume that the legally-mandated amount of insurance is all you need. But all it takes is one fender-bender to demonstrate how expensive it can be to only have the state’s minimum insurance coverage.

CNBC Select explains how to determine how much auto insurance you need and the types of coverage you can get to protect what’s most likely one of your most valuable assets — your vehicle.

What we’ll cover

How to choose the right amount of auto insurance

There’s no single auto insurance policy that would work for every driver. Your individual circumstances will help inform the right amount of coverage for your car.

CNBC Select recommends Geico for affordable coverage as it offers the lowest average premiums for minimum and comprehensive coverage. Farmers Insurance is another great option if you’re looking to save since it offers a whopping 22 discounts on auto coverage — more than any other company.

Geico Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Geico coverage and services are available in all 50 states and the District of Columbia and there are 16 different types of discounts available. In addition to the standard coverage options, Geico offers various optional add-ons, such as emergency roadside assistance, rental car reimbursement and mechanical breakdown insurance.

Farmers Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Farmers sells car insurance in every state except Alaska, Delaware, Hawaii, Maine, New Hampshire, Rhode Island, Vermont, Washington, D.C., and West Virginia and offers a whopping 22 discounts.

Nationwide Auto Insurance

  • Cost

    The best way to estimate your costs is to request a quote

  • App available

  • Policy highlights

    Nationwide offers near-nationwide availability and personalized services, such as On Your Side® Review, a free annual insurance evaluation to ensure you are adequately protected and are taking advantage of any discounts available to you.

Pros

  • Available in 47 states and the District of Columbia
  • Lowest average premiums for full coverage

Cons

  • High average premium for minimum coverage

When it comes to determining what coverage you need from your insurer, your first priority is to meet your state’s minimum requirements. Most states require you to get at least $25,000 in bodily liability insurance per person and $50,000 per accident, as well as $25,000 in property damage liability.

However, these numbers can vary widely. For example, California only requires $15,000 in bodily injury liability coverage per person and $30,000 per accident, plus just $5,000 in property damage liability. Meanwhile, in Alaska, you need to carry $50,000 in bodily injury liability insurance per person and $100,000 per accident, while the required property damage liability coverage is $25,000. Some states also require additional types of insurance. For instance, in Hawaii, you must have personal injury protection of at least $10,000.

Further, if you’re financing your car, your lender might require that you maintain full coverage, meaning you’ll need a policy that includes collision and comprehensive insurance.

While state and lender requirements can help you determine the minimum amount of coverage you need, it’s unlikely to be enough to save you from serious financial distress if you get in an accident and are at fault. It’s best to tailor your policy to your specific situation to ensure you’re sufficiently protected.

Types of auto insurance

It helps to look into different types of coverage, learn how they protect you, and set the amounts you’re comfortable with without breaking the bank.

Liability insurance

Personal injury protection (PIP) and medical payments (MedPay)

Collision and comprehensive insurance

Uninsured/Underinsured motorist coverage (UM and UIM)

Other types of auto insurance

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Bottom line

Why trust CNBC Select?

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.


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