| Calculating
exactly how much auto insurance you should buy can be as difficult as solving a Rubic's Cube. While your state sets a minimum amount of coverage that you must buy, it's not a good guideline to what you need
in order to be properly insured. Here are five steps you can take to find a solution to your auto insurance puzzle. Step One: Know The Required Pieces
The foundation of your auto insurance puzzle is liability
insurance. Forty-seven states require the purchase
auto liability insurance (Mississippi, New Hampshire,
and Tennessee don't mandate liability coverage), so
your insurance minimum will depend on wh
ere you live. For example, in Texas, drivers have to purchase at least $20,000 worth of bodily injury coverage per person, $40,000 worth of bodily injury coverage per accident, and $15,000 worth of property damage coverage (also known as 20/40/15). Liability
insurance is designed to pay other people for your
mistakes. If you crash into someone else and it is
your fault, your liability insurance will pay for the
damages to that person's car, his or her medical expenses,
and his or her pain-and-suffer
ing damages. Colorado,
Delaware, Florida, Hawaii, Kansas, Kentucky, Maryland,
Massachusetts, Michigan, Minnesota, New Jersey, New
York, North Dakota, Oregon, and Utah also say you have
to buy Personal Injury Protection (PIP) coverage. Pennsylvania
requires its resi
den
ts to buy medical-expense coverage, which is similar to PIP.
PIP pays for your medical expenses, lost wages, and other expenses that arise from an auto accident. Typically, PIP pays for 80 percent of your losses up to the limits of your policy. It also pays a death benefit. Other
states mandate uninsured/underinsured motorist coverage for all drivers. UM/UIM is like liability insurance, but rather than paying for damages done to someone else, it protects you
if an uninsured driver crashes into you. In most states,
UM/
UIM covers only medical expenses and pain-and-suffering damages only; however, coverage for damage to your car is available in 22 states and Washington, D.C. Note
that some insurance companies will not sell you insurance unless you choose liability limits higher than the state's minimum requirements. The higher the liability limits you choose, the higher your premium. Continue
to
Step 2: Know the optional pieces By
Joe
Frey
insure.com |