How Much Car Insurance Do You Need?
Each state sets their own minimum requirements. Florida and a few other states have the lowest minimums set at 10/20/10 ($10,000 bodily injury for one person, $20,000 for all people injured in an accident, and $10,000 for property damage).
These minimums are drastically inadequate and will not cover losses in most major accidents.
The state with the highest minimum requirements is Alaska (50/100/50). This rate is what most experts recommend as the minimum amount of coverage.
The rule of thumb when deciding how much car insurance you should get is to figure out how much your assets are worth.
If you have $100,000 in assets, you better get at least that much liability coverage. If you don't, you run the risk of getting sued if an accident causes more damage than what's covered.
If you have considerable assets, you will need to set your car insurance coverage high (100/300/100) and get an umbrella policy that will cover damages beyond this amount - usually up to $1 million.
Umbrella policies are relatively inexpensive for the amount of coverage you get.
Remember - the purpose of car insurance is to protect your assets in the event of a major accident. Make sure you're adequately covered.
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- Gregg Fidan
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About: Gregg Fidan
Gregg Fidan + is the founder of RealCarTips. After being ripped off on his first car purchase, he devoted several years to figuring out the best ways to avoid scams and negotiate the best car deals. He has written hundreds of articles on the subject of car buying and taught thousands of car shoppers how to get the best deals.