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Auto Insurance

How to Determine How Much Auto Insurance Coverage You Need

When shopping for auto insurance, you may be tempted to find the plan with the lowest premium and stick with it. However, this can lead to missing out on necessary coverage. Depending on where you live, how you pay for your car and how you use your vehicle, you may need more coverage than the cut-rate policies will offer. Here’s how you can determine how much coverage you need.


How much liability coverage can you afford?

Liability coverage is crucial. This coverage is required by law in most states, and it’s the coverage that pays for any injuries and damages you cause in an accident. Generally, the amount of liability coverage that’s required by law is less than you should opt for if you can afford more. Your net worth determines how much coverage you need. You can figure out your net worth by adding up the value of all your assets and subtracting your debts.  


Are you leasing or financing your vehicle?

Leasing or financing your vehicle means that you need more coverage. Whether you’re leasing or financing, you need comprehensive coverage, which covers damage caused by events you can’t control, and collision coverage, which covers damage caused by other drivers or objects you hit. You may also want to consider gap insurance, which some leases include. This type of insurance pays the difference between what you owe on your vehicle and what it’s worth in the event of a total loss.


What coverage does your state require? 

Some states require types of insurance that aren’t required in other states. For example, personal injury protection (PIP), which pays for medical bills and funeral expenses, is only required in certain states. MedPay, which covers medical bills, is required in Maine and New Hampshire. A few states require Uninsured motorist coverage (UM/UIM), which provides coverage if an at-fault driver’s liability limits won’t cover all your medical bills or damages. 


Do you drive for a ridesharing service?

Rideshare companies are typically required by state law to provide their drivers with insurance coverage. However, it doesn’t cover everything. Rideshare insurance fills the gaps between your personal insurance and what the rideshare company provides. Some examples of times rideshare insurance would kick in are the times you’re waiting to match with a rider or when you have a passenger in your vehicle. Determine whether the coverage supplied by the rideshare company meets your needs, and if it doesn’t, consider adding rideshare insurance to your existing policy. 


How much auto insurance you need can depend on a variety of factors, many of which can change over time. If you’re in the market for car insurance, the Nsure app can help you compare policies from 50 top-rated insurers in less than 5 minutes. Be sure with Nsure.

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