Do you need more auto insurance than the state-required minimum?

When it comes to auto insurance, a lot of people try to get by with the bare minimum. They don't want to spend a lot on insurance, so they will purchase no more coverage than what is required in their state - their "Financial Responsibility Limit."

But state-required minimum limits could leave you less protected than you want to be. In the event of an accident-related lawsuit, your home, income, savings and investments could be at risk. In worst-case scenarios, if you're found at fault in an accident, having just the state-required minimum limits might also leave you exposed to costs related to an accident-related death. Therefore, you should carefully consider whether the minimum limits are enough for you.

When making a decision about how much and what kind of car insurance to purchase, start with what is required and go from there. Most states require that you carry a certain amount of liability insurance. This type of coverage pays for accident-related bodily injury and/or property damage costs for others involved in the accident when you are at fault.

But third party liability will not cover any of your own medical or repair costs, so you may want to purchase personal injury protection (PIP) as well. This coverage covers reasonable and necessary medical and hospital expenses when an insured is involved in a covered loss, it can also help you with other expenses while you're healing. These vary state to state, but can include: income continuation, loss of services, funeral expenses and child-care expenses.

In addition to the various types of liability insurance, insurance is also available for damage to property. Collision coverage typically pays for damages if you're in a covered accident that involves other cars or objects, like a tree or a streetlight. Comprehensive coverage typically pays for damages on covered costs that aren't caused by a collision.

When requesting a car insurance quote, it may be in your best interest to ask the company providing one to break down the cost by coverage so you can determine what you can afford to purchase.

Courtesy of ARAcontent