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How Much Car Insurance Do You Need?

Whether you’re choosing your first auto insurance policy, making a switch, or looking for additional coverage, it is important to understand the basics of car insurance. Here’s what you need to know:

Types of Car Insurance Coverage

There are many types of auto insurance policies available. These policies provide various levels of protection. Some drivers choose to carry all these types of policies and others choose the ones that are most important to them. For help choosing the right coverage, consult a professional insurance agent.

Collision Coverage

Collision coverage pays for damage to your vehicle if it is in a collision.

Comprehensive Coverage

Collisions are only one way cars can sustain damage.  If thieves, fire, flooding, vandalism, or storms damage your car, collision coverage won’t be enough. Comprehensive coverage pays for repairs for your vehicle if it is damaged by something other than a collision.

Liability Coverage

If you are responsible for an accident that damages someone else’s property or injures another person, you’ll need liability coverage. Liability coverage will take care of court costs and any payments you are liable for.

Personal Injury Protection

Even minor injuries can result in huge medical bills. Personal injury protection (or PIP) pays for the medical costs of treating the driver’s injuries, and the injuries of the other passengers in the car. This coverage protects you no matter who is at fault in the accident.

Uninsured/Underinsured Motorist Coverage

If you are in a collision with another driver and the other driver is at fault, you expect their insurance to cover any damages. However, some drivers don’t have enough insurance, and some don’t have any at all. In this case, uninsured/underinsured motorist coverage will protect you and your vehicle.

Extra Coverage

There are plenty of add-ons and extra coverage options to choose from. Common extras include:

  • Roadside assistance—If find yourself stranded on the side of the road, it may be nice to have roadside assistance coverage to pay for towing and other related expenses.
  • Rental car reimbursement—You still have places to go while your car is being repaired. Rental car reimbursement will make it affordable for you to continue driving to your normal destinations.
  • Glass coverage—Sometimes there is nothing you can do to prevent your windshield from getting chipped or cracked, but you can choose an auto insurance policy that makes it easy to get the windshield fixed or replaced.

How To Choose The Right Auto Insurance Policy

Once you understand the coverage options available, you’ll need to choose a policy.  Ask yourself the following questions when choosing your next car insurance policy:

Have You Met The Legal Requirements?

Most states in the U.S. require drivers to carry some amount of car insurance. If you drive without insurance you risk being stuck with the full cost of medical bills and property damage, but you also risk legal fines, losing your driver’s license, or even jail time.

Requirements will vary from state to state. In New Jersey, drivers are required to have liability coverage, personal injury protection, and uninsured motorist coverage.

What Type Of Vehicle Do You Drive?

If you drive an old car that has been handed down through the family, it may not be in your best interest to invest in collision, or comprehensive coverage. If you drive a nicer, newer car, that coverage may be more important. This is particularly true if you are still making payments. Many lenders will require collision and comprehensive insurance to protect their investment. Consider the make, model, and age of your vehicle when you decide how much insurance to get.

What Is Your Driving Record Like?

If you have a history of crashes, speeding violations, or minor collisions, it is probably worth investing a little more in insurance.

What Is Your Budget?

Analyze your budget to see how much you can afford to spend on insurance. You may choose to pay higher premiums each month so you have a lower deductible, or you may opt for lower premiums and a higher deductible.

What Do You Want To Protect?

If you have a lot of assets, you have more financial resources, but you also have more to lose in the event of a lawsuit. The right insurance policy will make sure your assets are protected.

Are You Eligible For Discounts?

There are lots of ways to save money on auto insurance without skimping on coverage. Talk to an insurance agent to see if you are eligible for any discounts. Insurance agencies often offer discounts for drivers who have clean records or who take a safe driving course. You can also often get discounts if you bundle your auto insurance policy with other insurance policies from the same company.

To learn more about insurance options that are available to you, visit Esposito’s website and request a quote. An experienced agent can help you evaluate your current policy or choose a new one.


photo credit: Celebrate My Drive: Adjust and Use Side Mirrors via photopin (license)

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