Auto Insurance: How Much to Buy?

Determining how much auto insurance you should buy is a matter of looking at your assets and needs, but also state regulations. Many states require certain forms of insurance, along with payment levels. To learn how much you must buy and how much you should buy, we analyze each kind of insurance.

Bodily Injury Liability

This coverage, required in most states, compensates the driver of the other car and its passengers and covers the people within your own car. The idea is to protect against lawsuits.  Buy bodily injury liability, and you'll see two different designations. If you buy bodily injury worth $100,000/$300,000, each of the people injured can be compensated $100,000. However, a limit is imposed, in this case up to $300,000 per accident.

The more assets you have, the more protection you need. The amount you'll pay a month will depend on the area in which you live, and the frequency of bodily injury in that area.

Property Damage Liability

This coverage pays for the repair and replacement of the other driver's car or property. States may require this insurance, often at a minimum of $5,000. Consider the potential cost of other vehicles on the road, and the costs to repair them in the case of an accident. This coverage is therefore no area to skimp. A minimum of $50,000 for each vehicle you own should be purchased.

Personal Injury Protection
This coverage takes care of the medical and funeral costs associated with an accident. But if you already have health, life and disability policies, you may already be covered. You can opt out of this auto coverage.

Uninsured or Underinsured Motorist
More and more, this coverage is essential, and mandated by some states. A $100,000 policy charges cheap premiums, and covers medical nd funeral costs for you nd your family in the case of injury from an uninsured driver.

Collision and Comprehensive
This is the area where you should up the deductible to the highest amount you can, saving you money on premiums nad protectign you in case of accident. Collision reimburses you for the full cost of repairs or replacement of your car after an accident. Comprehensive covers you in the event your car is stolen or damaged by natural disaster or vandalism.

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Consider this when determining amounts. This coverage is requird on most lease contracts, and essential for expensive cars. But for other cars, it may not be necessary. The amount you'll receive from insurance is the Kelley Blue Book value, which declines with your car's age. If the cost of your collision and comprehensive is more than 10% of your car's Blue Book value, It may make more sense to drop this coverage.

To see what your state requires in terms of coverage, consult the following chart. Under Liability Limits, the numbers are as follows: minimum bodily injury liability amount for one person, minimum bodily injury liability for all people injured, and minimum property damage liability.


State

Liability limits
(in thousands of dollars)

Personal Injury Protection required?

Uninsured/Underinsured motorist coverage required?

Alabama

20/40/10

No

No

Alaska

50/100/25

No

No

Arizona

15/30/10

No

No

Arkansas

25/50/15

No

No

California

15/30/5

No

No

Colorado

25/50/15

Yes

No

Connecticut

20/40/10

No

Yes

Delaware

15/30/5

Yes

No


D.C.

25/50/10

No

Yes

Florida

10/20/10

Yes

No

Georgia

25/50/25

No

No

Hawaii

20/40/10

Yes

No

Idaho

25/50/15

No

No

Illinois

20/40/15

No

Yes

Indiana

25/50/10

No

No

Iowa

20/40/15

No

No

Kansas

25/50/10

Yes

Yes

Kentucky

25/50/10

Yes

No

Louisiana

10/20/10

No

No

Maine

50/100/25

No

Yes

Maryland

20/40/15

Yes

Yes

Massachusetts

20/40/5

Yes

Yes

Michigan

20/40/10

Yes

No

Minnesota

30/60/10

Yes

Yes

Mississippi

10/20/5

No

No

Missouri

25/50/10

No

Yes

Montana

25/50/10

No

No

Nebraska

25/50/25

No

No

Nevada

15/30/10

No

No

New Hampshire

Not required 25/50/25

No

Yes

New Jersey

15/30/5

Yes

No

New Mexico

25/50/10

No

No

New York

25/50/10

Yes

Yes

North Carolina

30/60/25

No

No

North Dakota

25/50/25

Yes

Yes

Ohio

12.5/25/7.5

No

No

Oklahoma

10/20/10

No

No

Oregon

25/50/10

Yes

Yes

Pennsylvania

15/30/5

No

No

Rhode Island

25/50/25

No

Yes

South Carolina

Not required 15/30/10

No

Yes

South Dakota

25/50/25

No

Yes

Tennessee

Not required 25/50/10

No

No

Texas

20/40/15

No

No

Utah

25/50/15

Yes

No

Vermont

25/50/10

No

Yes

Virginia

25/50/20

No

Yes

Washington

25/50/10

No

No

West Virginia

20/40/10

No

Yes

Wisconsin

Not required 25/50/10

No

Yes

Wyoming

25/50/20

No

No

To learn more about auto insurance, read our continuing series, including articles on common types of coverage, choosing the best plan, filing a claim, and more.

 

Other Articles:

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Car Buying vs Car Leasing

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Product Warranties

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