Car Insurance Coverage Calculator
Not all car insurance coverage is the same. Many people overpay for coverages they don’t need, while others don’t have enough coverage but don’t know until it’s too late. Getting the right level of car insurance is not one size fits all. What is most important to one consumer isn’t necessary for another.That’s why it’s critical to get the car insurance that fits your needs.
So how much car insurance should you buy? – There are two correct answers:
First, you need enough insurance to drive legally dictated by the minimum car insurance requirements of by your state.
Second, you need enough car insurance to protect your life from turning into a living hell if you have a car accident. That can be as easy as buying the minimum coverage. Or it can be much more complicated.
We’ll walk you through our guide on figuring this out.
Who should buy minimum levels of liability car insurance?
- Minimum liability is rarely advisable, but if you can’t afford more, it’s better than no insurance.
- If you have no savings or assets, minimum liability coverage may suffice.
In most states the minimum liability required by your state is not enough to pay for serious injuries or to replace a newer car. It is only enough to drive legally.
If you own only the clothes on your back and a very old car, you can get by with just the minimum levels of liability mandated by your state. That’s because you’re probably what is known as “judgment-proof.” You may lose if someone decides to take you to court to pay for an accident you cause, but you have no real assets to take.
If you have savings or a home or even expensive jewelry and valuable collectibles, you are not judgment-proof. And you need more coverage.
To help you decide how much liability insurance you need, we’ve created three liability insurance levels as a rough guide. Levels of coverage offered will vary by state and by insurer. Liability insurance will not repair your own car.
In the levels below:
- The first two numbers refer to bodily injury liability, which pays the hospital bills of anyone you injure.
- The first number is the per-person limit.
- The second is the per-accident limit.
- The third number is the property damage liability limit, which would repair or replace the car of anyone you hit.
50/100/50: This level of coverage is recommended for those who have an older car, few assets, don’t drive much and are on a tight budget, for instance college students and retirees who are downsizing.
100/300/100: This is the level most financial experts say is appropriate for middle-income earners with a typical level of savings, adequate in most circumstances. The cost of liability insurance, once you have bought the basic levels, does not increase exponentially. Moving to 100/300/100 will not cost twice as much as 50/100/50 but approximately $96 more a year, on average.
250/500/100: If you own an expensive home or have saved diligently, you may be worth millions even though you do not consider yourself rich. We would suggest supplementing even this high level of coverage with an umbrella liability policy that extends your protection by $1 million or more. It’s relatively cheap.
Who should buy uninsured motorist car insurance?
- If you have your own health insurance and you have purchased collision coverage, you may be able to skip uninsured motorist coverages if your state allows.
- It is a good idea to keep uninsured motorist coverages if you can afford to, because they can minimize your financial losses from deductibles and coverage caps.
Your state may require that you buy uninsured motorist bodily injury coverage, which pays your hospital bills if you are hit by an uninsured driver. Your state may require only that you be offered this coverage but allow you to turn it down.
If you buy this coverage, it typically will come in the same amounts as your own liability coverage and costs an average of $83 a year.
A few states also require uninsured motorist property damage, which usually pays for some — but not all — of the damage to your own car. It doesn’t cover hit-and-run accidents in most states, though.
Do you need comprehensive and collision coverage?
- Yes, if your car is less than 10 years old.
- Yes, if you can’t afford to repair or replace your car.
- Yes, if you live in an area prone to flooding, hail, tornadoes or animal strikes.
Comprehensive insurance pays for damage to your car from severe weather, fire, collisions with animals and theft. It also pays to repair your car if you cause an accident and costs approximately $172 a year on average.
This is where car insurance for a 10 year old car comes into play. If your car is less than 10 years old, you should consider buying comprehensive and collision coverage. You should also carry comprehensive and collision insurance if your car is 10 years old or older, but worth more than $3,000, or if you can’t afford to repair or replace it.
If you owe money on your car, your lender requires you to have collision and comprehensive coverage, which would repair or replace your car. Liability insurance pays only for others’ cars.
You must choose a deductible amount for collision and comprehensive coverages. Damage below this amount is your responsibility to fix.
We recommend that you keep deductibles low while you are still making payments on a car. Once the car is paid off, build an emergency fund and raise your deductible to match it.
Do you need medical payments or personal injury protection?
- Yes, if you don’t have health insurance.
- Yes, if you can’t afford or don’t have the savings to live without a loss of income due to injury.
Your state, especially if it is a no-fault state, may require that you buy personal injury protection so that your injuries in a car accident are always covered up to your limits, no matter whose fault the accident was. It usually includes coverage for lost wages as well.
Medical payments coverage is required by a few states but is optional in most, paying medical expenses up to your limits. If you don’t have your own health insurance coverage, you should consider this coverage. If you have a high-deductible health plan, medical payments may help pay the deductible.
Personal injury protection costs an average of $198 yearly and Medical payments costs an average of $22 a year on average.
How can you save money on car insurance?
In order of impact and potential savings, we suggest the following steps for drivers trying to save money on their car insurance bills:
- Shop around – Car insurance rates major insurers charge the same driver in the same car can vary by hundreds, sometimes thousands, of dollars. To see how much you can save on your auto insurance, enter your zip code above and get free quotes from one or more of the companies that provides the cheapest rates in your area.
- Look for car insurance discounts.
- Consider a named driver exclusion if a member of your household has a high-risk driver history.
- Raise your deductibles.
- Drop collision and comprehensive coverage altogether if you own your car outright.
- Drop other optional coverages such as uninsured motorist or medical payments.
- Reduce the amount of liability coverage you are buying.