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How much insurance do you need?

Check out your state’s minimum insurance requirements. It’s possible that the minimum coverage required might not be that different than what you really need. When deciding how much coverage you need, make sure you’re covered for an amount equal to the total value of your assets. To keep premiums low, choose collision coverage with a high deductible, and plan to pay routine repair costs with your own money.

Your auto insurance is a collection of different policies that cover you in different ways. Here’s how they break down:

  • Liability coverage – These policies help cover liability and expenses when you’re at fault in and accident. The money will go to the people you hit, but it won’t cover the people in your car.
  • Bodily Injury Liability (BIL) – This policy pays for the medical expenses of people injured in a crash in which you’re at fault. You’ll often see BIL policies described as a “20/50” policy or a “100/300” policy. These numbers describe the maximum dollar amount the policy will pay for a single person’s injuries and the maximum for all the injuries sustained by all the occupants of the other car. For example, a 20/50 policy will pay a maximum of $20,000 for a single person’s injuries, and up to $50,000 total for the injuries of everyone in the car you hit.
  • Property Damage Liability – This policy pays for damage done to the other car if you’re at fault in an accident. Property liability is sometimes referred to alongside BIL as a third number, so a 20/50/10 liability package will cover up to $10,000 for damages to the other car.

The following policies cover you and your car in an accident:

  • Personal Injury Protection (PIP) – This covers your and your passengers’ medical expenses after an accident. If you lose time at work because of your injuries, this policy may also cover lost wages.
  • Uninsured/Underinsured Motorist Coverage – This helps cover costs if you are hit by someone without insurance, or minimal coverage.
  • Collision – This policy covers repairs to your car after an accident.
  • Comprehensive – This policy covers costs if your car is stolen or damaged outside of an accident.
Nearly every state