Identifying Your Auto Insurance Needs

Shopping for auto insurance coverage can seem complicated. So many options are available and the terminology might seem confusing. When you are trying to find the right coverage to protect your car and follow the laws of your state, taking your time and identifying exactly what your vehicle needs can make the process a little easier.

Identifying Your Auto Insurance Needs

List Your Concerns

Before you start shopping for coverage, begin with a list of your concerns. Identify the possible problems you may face. Write it down so that you know what to look for when you are comparing your options.

 

The concerns you may want to consider include:

  • Theft of your vehicle
  • Vandalism
  • Damage to your car when you are driving
  • Property damage you cause in an accident
  • Injuries to yourself
  • Injuries to passengers in your car
  • Injuries to the driver or passengers in another vehicle
  • Damage to your car from a storm
  • Accidents caused by a driver who does not have insurance

Although certain concerns are more pressing than others, such as taking responsibility for accidents you cause or paying for medical bills if you are hurt in an accident, it is important to address all of the concerns and consider your personal risk before you find coverage.

Learn the State Laws

Each state has different laws for motor vehicles. In most cases, you will need the minimum liability insurance to follow the state laws, but the exact amount of coverage will vary.

Take time to find out how much you are required to have as the state minimum. For example, if you need to have a minimum of $10,000 for property damage, then that is the lowest amount you can obtain for your car within your state. 

Evaluate Your Risks

After you know the laws within your state and you have a list of concerns, take a moment to consider the reality of your situation. Ask a few questions to simplify the process. 

Questions you may ask to determine your risk include:

  • Have you ever caused an accident in the past?
  • Do you have medical insurance?
  • Is your car expensive to repair?
  • Do you live in an area that has several storms each year?
  • Do you have a garage? If so, is a theft from your home then possible?
  • Is there graffiti near your home? Do you see graffiti near your work?

By asking questions, you are narrowing down your needs. For example, if you live or work in an area that does not have any graffiti and the risk of vandalism in the area is low, then it might not be necessary to include comprehensive coverage. This is particularly true if you keep your car in a garage and do not drive often.

Determining the right amount of coverage for your auto insurance needs will depend on your situation. As a general rule, you need to have a minimum of liability coverage that aligns with the state laws. Additional insurance is a personal choice. Collision and comprehensive coverage, which protects your car from most possible scenarios, are available if you have many concerns to address or you want to limit your financial risks if an accident occurs.