How Much Car Insurance Coverage Do I Need?

Getting just the right amount of auto insurance can be a tricky process. On one hand, you want to be fully protected in case an accident arises. On the other hand, you don’t want to spend more of your hard-earned money than you need to by purchasing more coverage than you are likely to even use. Although it’s impossible to determine with absolute certainly which auto insurance plan would cover your needs for the future, there are a few simple tips and tricks to consider before settling on the perfect plan.

1. Find Out Your State Requirements

Every state has different requirements for the minimum amount of auto insurance each driver in the state is legally obliged to have. Determine what the requirements are in your state and use this as a base for your coverage plan. More often than not, these requirements are sufficient for establishing a good amount of insurance coverage for your needs.

2. Balance Your Insurance Plan

The best way to avoid overextending yourself in your auto insurance plan is by balancing the amount of your coverage to the total value of your assets. For example, you wouldn’t want to purchase an insurance plan that covers $10,000 worth of damages when your car is only worth $5,000. Consider these figures as well as how much you have in the bank for investing in a new vehicle in case of an accident.

3. Look for a Plan With a High Deductible

To help keep your premiums low, specifically look for auto insurance plans with high deductibles. Prepare to cover the costs of any routine repairs with your own money to keep the price of insurance as low as possible. This will help you get the coverage you need while keeping the price within your budget.

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