The Right Policy

How much auto insurance do you really need? Knowing how much coverage you actually need is part of the research involved in the car insurance rate policy. You do not always need all of the coverage that agents lead you to believe. It is very important to know what you need. Comparing car insurance rates will help ensure that you speak to multiple insurance representatives who can help you find the best deal. Always question them and investigate on your own to make sure you get the right policy at the right price.

Almost every state requires you to buy a minimum amount of liability coverage. Chances are you'll need more liability insurance than the state requires because accidents cost more than the minimum limits. If you're found legally responsible for bills that are more than your insurance covers, you will have to pay the difference out of your own pocket. These costs could wipe you out!

It is recommended that you have $100,000 of bodily injury protection per person and $300,000 per accident. If your net worth is more than $300,000, consider buying additional liability insurance. You may also consider purchasing an umbrella or excess liability policy. These policies pay when your underlying coverages are exhausted.

Typically, these policies cost between $200 and $300 per year for a million dollars in coverage. If you have your homeowners and auto insurance with the same company, check out the cost of coverage with this company first. If you have coverage with different companies, it may be easier to buy it from your auto insurance company.

In addition to liability coverage, consider buying collision and comprehensive coverage. You don't decide how much to buy. Your coverage reflects the market value of your car and the cost of repairing it.

Decide on a deductible -- the amount of money you pay on a claim before the insurance company reimburses you. Typically, deductibles are $500 or $1,000; the higher your deductible, the lower your premium.