How Much Car Insurance Do I Really Need?

By Larry Lubell
Think you’re paying too much for car insurance?
Today we are all looking for ways to save money, but driving with out auto insurance is irresponsible, as well as illegal in most states. Today, even small accidents can result in thousands of dollars in damages.

Due to the high price of vehicles, ever-increasing medical costs, and new bankruptcy laws which make it even more difficult to eliminate your debits; it is financial suicide to drive with out insurance.

When looking for car insurance, no one wants to pay more than they have to in order to get the needed coverage. The question is How Much Car Insurance Do I Really Need?

Below are some suggestions to help you lower your insurance costs.

First you have to understand the basics of Car Insurance.
If you have a new car and or a car that is being financed, you are going to need to get COMPREHENSIVE COVERAGE & COLLISION, that’s the Portion of an auto insurance policy that covers damage to the policyholder’s car whether from a collision with another car, or damage from fire, explosions, earthquakes, floods, and riots), and theft. This will need to be purchased along with Liability Insurance. Because your insurance company might be obligated to replace or repair your car in the event of a loss, the year, make and model of the car will have a major impact on the cost of the Car Insurance. Clearly, an insurance company would rather layout the money to replace a seven-year-old Dodge Neon, then a new $450,000 Porsche Carrera GT.

If you have an older car or a car that is not being financed, you can select to purchase just Liability Only.
LIABILITY INSURANCE covers what the policyholder is legally obligated to pay because of bodily injury or property damage caused to another person, to specified limits. A liability only policy will cost less than buying full coverage.
When one purchases Liability Insurance you have the option to select different Limits. It is important to understand that the LIMITS OF LIABILITY state the Maximum amount of money that the insurance company will pay for a covered loss. For auto insurance In Illinois the requirements are $20,000 per person Bodily injury /$40,000 Total per accident bodily injury /$15,000 Property damage. In Indiana they are $25,000 per person Bodily injury /$50,000 Total per accident bodily injury /$10,000 Property damage.
It is important to understand that a person can always sue you for more money than is covered under your insurance policy- it for that reason that I suggest carefully evaluating your financial exposure. If you have little or no assets, and you have an accident for which you were covered, it is unlikely that the judge will award damages in excess of your coverage. If however you manage a Hedge Fund, and own a three million dollar home, and large sums of liquid assets, it would be financially irresponsible to be driving around with State minimums.

So the question is How Much Car Insurance Do I Really Need is dependant on your own personal finances. Please feel free to call Urban Insurance at 800-680-0707 to speak to an agent.