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How Much Auto Insurance Should You Have?

The question of how much auto insurance you should have

It’s always a knotty one, this. It’s hard because while insurance companies use actuarial software to work out the probability that you’ll have an auto accident or other vehicular incident in any given year, you don’t have access to the same information. For you as a buyer of auto insurance, the future is a dark glass, and the range of probabilities that disaster will strike an unknown dataset. When we say ‘disaster’, what we mean is ‘disaster’ along a broad spectrum that starts with someone keying your Maserati or you Ford station wagon. At the other end of the spectrum is the nightmare no one wants to face: a serious auto accident with injuries or even deaths attendant.

Insurance Self-assessment

So, first up you need to look at yourself and at your own life. How can you get a handle on the levels of ‘auto’ risk that you face? One way is to examine your motoring behavior over the previous years. If you’re honest with yourself, you’ll know if you’re a careful driver. But you’ll also need to think about other factors. These include such things as the type of car you drive, the sorts of highways you normally use, and the amount you drive your automobile.

If you Google ‘how do I choose car insurance’ you’ll get some big players in the top four search positions who’ve outbid every other advertiser for that spot. Progressive and EverQuote are numbers one and two respectively. However, below you’ll see a useful little bulleted list of things to take into account when buying car insurance.

Let’s take the last one first. You may not drive that much, for example. If, say, your annual mileage is less than 10,000, you can class yourself at significantly lower risk. If it’s less than 5,000, you’re in a pretty small segment of the auto-owning population that effectively barely uses their vehicles in a year. The correlation is simple: the less you drive, the less you’re at risk of an accident.

Anyhow, it’s worth looking below these results and getting some comparator sites to crunch your numbers. It’ll give you a baseline that could come in handy when talking to a real live agent. It’ll also help when you then proceed to individual providers’ websites and try and find out if you can get your premiums down a little.

Then there’s the type of car you drive. If your vehicle is slow, solidly constructed, and unattractive to those prone to grand theft auto, again, your insurance risk is lower. You’re lower speed also correlates with fewer accidents and less serious accidents, too. And if you’re driving to work along empty country tracks to get to your Adirondack bear-watching hide, the fact that you never even meet another auto lowers your risk.

These are extreme examples, but they’re only there to communicate the concept. You can choose differing levels of auto insurance (down to a minimum), and your behavior and driving habits should inform that decision.

Now You Know How Much Insurance To Have, Get a Quote

What next?

Once you’ve reflected on your automotive foibles, check out what’s on the market. There are loads of resources on the Web to help you compare options. If you’re a street-parking owner of a vintage Firebird, you may want to up the benefits and premiums relevant to GTA. Your aim should be to calibrate your coverage to your own specs.

Look for recommendations by trusted domain authorities such as motoring organizations or non-profits, or industry observers in the reputable press (rather than any old blog you find on a site with thin content). You’ll find comparators of the major and minor players, and you should also find general information about any discounts you’re entitled to (for example, because of your age).

Your minimum level of insurance will also depend on what state you live in. New Yorkers and Texans may be required to insure themselves to differing levels. If you’ve a delivery truck or you drive passengers around you may want to pay for liability insurance. In many states, though, the minimum auto insurance requirement may be a pretty close match to what you actually need as a driver in that state.

One thing to ensure is that you’re covered up to the aggregate value of your auto assets, just in case they’re ‘gone in 60 seconds’. Another thing to look out for is the premium-lowering potential of paying for minor repairs yourself. You may be advised, too, to secure a high deductible on the collision aspect of your insurance. Then, make damned sure you don’t have a collision.