How Much Auto Insurance Coverage do I Really Need?

Advisors Insurance AgencyAll Blogs, Auto Insurance

old car insurance

old car insurance
Purchasing car insurance can be confusing and sounds expensive if you’re unfamiliar with the types of coverage that you need; and more often than not, most people feel skeptical when an insurance agent recommends coverage higher than the minimum insurance required. “Will I really ever need that much coverage?”

However, while auto insurance coverage limits of $25,000 and $50,000 may seem like a lot of money, the reality is that accidents are expensive and state required auto insurance minimums will not be enough to cover any property or bodily injuries that occur in an accident.

When deciding on how much auto insurance coverage to purchase, it’s important to take into account a few different factors that can help determine how much auto insurance coverage you actually need.

How much auto insurance is required by my state?

According to the South Carolina Department of Insurance, South Carolina requires you to have:

  • A minimum of $25,000 per person for bodily injury and $50,000 for all persons injured in one accident. These claims for bodily injury can include medical expenses, lost wages and pain and suffering.
  • A minimum limit of $25,000 for all property damage in one accident, which includes damages to other vehicles, buildings, walls, fences and equipment.

Do I need any coverages in addition to what is required by my state?

Sometimes, yes, depending what your needs are you will need some additional auto insurance coverage. Consider these added coverages below if you live in a big city, have a long commute or own an expensive or new car.

  • Collision coverage: provides coverage for any damages to your vehicle if you hit another car or object.
  • Comprehensive coverage: adds coverage to your vehicle from non collision related accidents like theft, natural disasters or extreme weather conditions.
  • Uninsured or underinsured motorist coverage: covers you in the event of an accident with an uninsured or an underinsured driver.
  • Personal injury protection: which covers any possible medical expenses that are not covered by the other driver’s liability insurance if you are in an accident caused by the other driver.

How do I decide how much auto insurance coverage to purchase?

It’s a good idea to purchase higher limits and more coverages than what is required, but always make an informed decision based on what your needs are.

Base your decision on:

  • Your personal assets: The more valuable assets you have, the more protection you need. Do you have an expensive car? Is your car new? Do you have enough savings in case you are in an accident and need to pay for damages that are higher than what you are insurance will pay?
  • Your budget: Only buy what you can reasonably afford.
    How much risk you can handle: If you have decent savings and feel you are able to pay for most damages out of pocket than you may be fine with higher deductibles and/or lower limits. However, if your savings are limited, consider purchasing an insurance coverage plan that offers higher limits, yet is still in your price range.
  • Your vehicle: If you have a new or valuable car, you’ll probably want comprehensive coverage. However, if your vehicle is not worth much, the cost of comprehensive coverage may not be worth it.

Auto insurance is like buying protection: always have enough

The purpose of car insurance is provide protection for you, your assets and your bank account. While buying the minimum car insurance required by your state may be a good idea for some people, for most it is not because of the amount of assets and risk they face while driving, and the amount of savings they do or do not have.

Be sure to talk with your insurance agent (844-272-0525) about all the different factors that affect the amount of insurance you should purchase and be realistic about what you can and cannot afford.