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How Much Auto Insurance Coverage Is Enough?


Ron Trumbo - Insurance Editor
Ron Trumbo
Insurance Editor
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Why Everyone Still Needs Insurance Agent to Determine Appropriate Coverage

Like most American drivers, your car is the largest source of risk for being sued for everything you have, and in some cases, what you will have. Every time you get in a car, there’s a reality that you risk damaging another person's property, hurting someone else, or even worse killing someone. This is where car insurance coverage comes into play.

It takes a reputable insurance agent to help you make an effective coverage decision considering that your auto insurance coverage protects all of your financial assets for payment of damages (both medical and property) and corresponding lawsuits due to an insurance claim.

Car Insurance Claims Depend on What and Who You Hit

Every car accident is different depending on the type of car you hit, and more importantly, the passengers in that car at the time.  In the blink of an eye, you can accidentally side-swipe a minivan will a stay-at-home mom and her three children. Realistically, you could easily find yourself in an auto insurance liability claim of $1.2 million dollars? How would you pay for this? If for example you’re a South Carolina driver with the state auto insurance minimums of $50,000 of bodily injury, you’re looking at a lot of out-of-pocket expenses not covered by your insurance. Imagine all of your assets that you could lose? You home; your investments; your savings; and even other assets of special sentimental value. Managing this risk is exactly why everyone still needs an insurance agent to help them find adequate auto insurance coverage — not just the lowest price.

Example of Insurance Claims and Corresponding Insurance Claims

 
Medical Expense
Lost Job Earnings
Suffering
Total Claim
Example 1: Administrative Assistant
$50,000
$40,000
$100,000
$190,000
Example 2: Engineer
$50,00
$80,000
$200,000
$330,000
Example 3: Dentist and Dental Assistant Passenger
$175,000
$225,000
$300,000
$700,000
Example 4: Stay-at-home Mom, 3 children
$700,000
$ -
$500,000
$1,200,000

When you compare auto insurance quotes online, you’ll be asked about the level of coverage you would like. Of course, the higher level of coverage will cost more, but it will more importantly protect more. Common auto insurance coverage levels in the quoting process includes: State Minimums,  Basic Coverage, Standard Coverage, and Above Average Coverage.

State Minimum Auto Insurance Coverage

Every state is different, and if you go to the respective state page within InsuranceLoco, you may find those levels, or access to your state's Department of Insurance where you are certain to find them. Again, it takes an insurance agent to help with navigating through this information. Ultimately, insurance companies and insurance agents should not be selling coverage below your state’s minimum. This is an example (ONLY AN EXAMPLE) of a minimum (low-level) coverage level.

- $15,000/$30,000 Bodily Injury Liability
- $5,000 Property Damage Liability
- $1,000 Medical Payments
- $15,000/$30,000 Uninsured and Underinsured Motorist Bodily Injury
- $3,500 Uninsured Motorist Property Damage


Basic Auto Insurance Coverage

This low-level auto insurance coverage level is suited for drivers who have limited assets, such as someone who lives in an apartment and lives paycheck to paycheck. THIS IS ONLY AN EXAMPLE.

  • $50,000/$100,000 Bodily Injury Liability
  • $25,000 Property Damage Liability
  • $5,000 Medical Payments
  • $50,000/$100,000 Uninsured and Underinsured Motorist Bodily Injury
  • $3,500 Uninsured Motorist Property Damage
  • Comprehensive and Collision coverage for $30/day rental car, and $50 for towing and labor

Standard Auto Insurance Coverage

Perhaps the most common coverage level purchased, Standard coverage commonly leaves a lot of gaps for potential risk, especially for home owners and business owners. THIS IS ONLY AN EXAMPLE.

  • $100,000/$300,000 Bodily Injury Liability
  • $50,000 Property Damage Liability
  • $5,000 Medical Payments
  • $100,000/$300,000 Uninsured and Underinsured Motorist Bodily Injury
  • $3,500 Uninsured Motorist Property Damage
  • Comprehensive and Collision coverage for $30/day rental car, and $50 for towing and labor

Above Average Auto Insurance Coverage

Now we’re starting to get into effective coverage levels. Depending on your assets (especially your house and financial investments), above average coverage is absolutely subjective. It takes an experienced insurance agent to help identify your coverage needs, almost like a financial advisor or personal accountant would. THIS IS ONLY AN EXAMPLE.

  • $250,000/$500,000 Bodily Injury Liability
  • $100,000 Property Damage Liability
  • $10,000 Medical Payments
  • $250,000/$500,000 Uninsured and Underinsured Motorist Bodily Injury
  • $3,500 Uninsured Motorist Property Damage
  • Comprehensive and Collision coverage for $100/day rental car, and $300 for towing and labor

Additional online resources: Esurance has a wonderful coverage counselor tool

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