How Much Car Insurance Do I Really Need?

  1. 37376 POINTS
    David G. Pipes, CLU®, RICP®
    Business Development Officer, T.D. McNeil Insurance Services, Fresno, California
    Your state might have a minimum requirement.  If it does, you must have that much coverage to comply with state law.  If you have decided to buy auto insurance you should start with the liability limit.  Set the liability limit high enough to cover you in any situation you can think about.  For example, you are at fault in an accident involving a fatality and serious injury to another person.  You need enough liability coverage to compensate the injured party and the bereaved family.  The company is going to stand between you and the injured party to the limits of the policy.  How high a wall of protection do you want?  Then there is your own automobile.  This is a more emotional issue.  If you have a lender, they will normally require physical damage coverage.  You have a range of deductibles which affect the premium somewhat.  However, the only way to reduce the cost of the policy is to not provide physical damage coverage.  Then if you are in that accident and your car is damaged—you pay the expenses.
    Answered on March 26, 2014
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