It’s estimated that each year there are over six million automobile accidents in the United States. This statistic helps explain why automobile insurance coverage is so important in this country.
It doesn’t matter if you’re involved in a slight fender bender or massive collision, insurance protects you financially from any liability you might have related to the crash.
Unfortunately, many people are unaware of exactly how much automobile coverage they need. So should you go with the minimum liability coverage? Or should you upgrade to full coverage?
In this guide, we’ll be answering these questions so you can get the right type of car insurance coverage for your specific needs.
What Is Minimum Liability Insurance Coverage?
The minimum liability insurance coverage is the bare minimum amount of insurance that your state requires. As we’ll learn later, this amount can differ depending on the specific state.
However, most of them tend to follow a similar amount. Minimum coverage provides liability protection in three areas: bodily injuries per person, bodily injuries per accident, and property damage per accident.
Most liability coverage in states follows the 25/50/25 rule. That means any insurance policy you have must have at least:
- $25,000 in coverage for bodily injuries per person
- $50,000 in coverage for bodily injuries per accident
- $25,000 in coverage for property damage per accident
However, it’s important to note that your state’s limit might be higher or lower than this amount.
Also, keep in mind that these are the minimum amounts of coverage that will only pay for the medical bills or property damage of other people if you cause the accident.
If you require medical attention or your car needs repair you will either need to go through the other driver’s insurance or pay out of pocket. That’s why many people choose to expand their coverage.
Different States Have Different Laws Surrounding Minimum Liability Coverage
Almost every state in the U.S. requires some form of minimum liability insurance coverage. Only two states don’t require this limit. They include Virginia and New Hampshire.
However, even in these states you typically need to show financial responsibility by purchasing some form of insurance.
As we mentioned, most states follow the 25/50/25 rule when it comes to minimum liability insurance coverage. However, that’s not the case for all of them. For example, North Carolina requires you to have:
- $30,000 in coverage for bodily injuries per person
- $60,000 in coverage for bodily injuries per accident
- $25,000 in coverage for property damage per accident
Certain states will also require you to have additional types of insurance. This typically includes UM coverage (aka uninsured motorist) and PIP coverage (aka personal injury protection).
UM coverage is needed to cover expenses by drivers with little to no insurance coverage and it’s required by twenty-two states. PIP coverage goes toward additional medical costs caused by the accident and it’s required by thirteen states.
That’s why it’s essential to check the specific insurance laws in your state to see what minimum coverage you need.
When Should You Consider Full Coverage?
In most situations, you should consider getting full coverage auto insurance if you can afford it. In addition to offering robust liability insurance, full coverage expands your policy to also include collision and comprehensive coverage.
The collision coverage will pay for any damage done to your car following a crash. Meanwhile, comprehensive coverage deals with unforeseen damage like theft or weather-related damage.
Full coverage is the best option for people driving new vehicles or expensive vehicles. In fact, in many cases, your lender might require you to have it. If you can’t afford full coverage you should at least consider raising your liability limits.
That’s because it’s quite common for the expenses associated with accidents to exceed the 25/50/25 limit. So by increasing your coverage limits, you can protect yourself financially.
When Is Minimum Liability Insurance Coverage Enough?
We mentioned that it’s best to go for full coverage if you can afford it. However, it’s important to note that this isn’t always the case. In some situations, minimum liability coverage might be enough for your specific needs.
For example, if you drive an old or low-value car, you probably don’t need additional protection to insure it. Similarly, if you rarely drive there’s a lower risk that you’ll get into an accident. In these cases, it might make sense to go with the bare minimum.
Lastly, if you live in a rural area with a lower risk of crashes, you might not need the higher coverage that’s often associated with urban areas.
How to Find the Best Automobile Coverage Insurance Provider
When searching for automobile insurance coverage there are three main things you should look for. The first thing is competitive rates. You want a provider that offers you as much coverage as they can with the most affordable premium.
We recommend that you ask the insurance company for a car insurance quote. Get quotes from multiple providers so you can find the best one for your budget or needs.
The second thing you should look for is flexible policies. You never know when you might need to add a car to your policy. Make sure that the provider gives you the freedom to do this.
This should also offer additional coverage add-ons to customize your policy for your specific needs. Lastly, make sure they have great customer service. Often your insurance provider will be one of the first people you call following an accident.
You not only want to make sure that they answer at any time of day but that they’re also polite and understanding. That way, you can remain calm in a stressful situation.
Appreciate Learning About Auto Insurance? Keep Exploring
We hope this guide helped you learn more about automobile coverage. As you can see, typically the best rule of thumb is to get as much insurance coverage as you can afford.
However, if you’re on a budget, discuss this with your insurance provider. They can provide you with the most appropriate plan for your needs.
Want more insurance advice? We have a lot of similar topics that you can find if you keep reading our site today.