Insurance Woes

How much coverage do I need?

Insurance Woes

The minimum amount of liability coverage you must maintain varies from state to state. But, beware since each state sets its own “legal” minimums that may or may not provide you with enough coverage. Beyond these legal minimums, any additional coverage is purchased at the buyers discretion. The key here is to find a balance betwixt adequate coverage and overpaying for insurance in order to have peace of mind for you and your family.

There are several different types of insurance coverage you’ll come across while shopping the rates. Bodily injury and property damage coverage are the most common since they’re mandatory in most states. Many insurers also offer additional coverage with various levels of financial protection. We’ll get to those in a minute, but there are a few things you should know first.

General guidelines published by Consumer Reports suggest a minimum of $100,000 per person for adequate bodily injury liability and $300,000 per accident, plus $100,000 for property damage liability. Your insurer would pay these amounts to someone you’ve been involved in an accident with. Bodily Injury Liability is required in most states and compensates the driver and passengers of another vehicle you’ve been in an accident with. Passengers in your vehicle are also covered. Protecting your assets from lawsuits is the key point behind this coverage. You could get sued even if the accident is not your fault.

This type of coverage is sold incrementally and designates both how much coverage per person you have in an accident, with an additional limit per accident. If you were to purchase $100,000/$300,000 of bodily injury coverage, for instance, then each person injured in an accident where you are at fault could be compensated $100,000, but only up to $300,000 per accident.

How much coverage you need is relative to the assets you have to protect. Consider this: If you make $25,000 a year and rent an apartment, $50,000/$100,000 should be sufficient. However, if you make over $60,000, own a condo worth $150,000 and have another $25,000 in personal investments, then $100,000/$300,000 of coverage is more what you’re looking for.

Your bodily injury liability premium depends on several variables from age and marital status to your credit and driving record. Where you live also has a big impact on your rate. For example, the New York State Department of Insurance says that, a 35-year-old married male living in rural Cortland County to increase his coverage to $100,000/$300,000 from $25,000/$50,000 would pay $86 more per year on average. In the Big Apple, this same man would have to pay an additional $240 per year because the frequency of accidents and bodily injury is markedly higher.

If you have substantial assets, get $300,000 in bodily injury on your automobile policy, and $300,000 on the liability portion of your homeowners policy. Then spend another $150 to $300 for a $1-million umbrella policy to cover yourself against all kinds of liability claims. If you still want more coverage, for an additional million, the cost is negligible. The Insurance Information Institute says it’s typically $75 to increase your coverage to $2 million and then $50 for each additional million in coverage.

Property Damage Liability pays for repairing and replacing someone else’s vehicle and/or property in the event of an accident. State minimums can be as low as $5,000 coverage, but that’s hardly enough to even begin repairing a new Cadillac or Mercedes-Benz, for example. A better strategy would be to have $50,000 of coverage on each vehicle you own. Your safest bet, however, would be to have at least $100,000 in total property damage liability coverage.

Most automobile insurance policies can have more specific protections added to them. Additional costs will apply. Many motorists opt for Comprehensive and Collision coverage because it conveniently pays out when your vehicle is damaged or lost due things like vandalism, natural disasters and theft. On the other hand, collision pays to fully repair or replace your vehicle after an accident. Deductibles for either coverage range from $250 to $1,000 per claim and policyholders usually pick their own. It’s best idea to go with the highest deductible you can afford. It will reduce the premium for this type of coverage, but the real purpose of collision coverage is to protect yourself against big losses rather than small ones. Sometimes it just makes more sense to pay out of pocket for small repairs.

Collision and comprehensive can make up 30- to 40-precent of your total premium. They are cash-value coverage, meaning that if your vehicle is written off, its Kelley Blue Book value is the most you can recoup. It is sensible to drop this coverage on older vehicles and save some dough if the cost of your collision and comprehensive is greater than 10 percent of your vehicle’s book value. Generally, this is around five years for most vehicles. Your biggest consideration should be, that if you get rid of this coverage and your vehicle is stolen, written off or damaged in an at-fault accident, you’ll be the one stuck paying the bills.

Uninsured or Underinsured Motorist coverage is a safety net option that pays medical and/or funeral costs for you and your family if you’re injured or worse by a hit-and-run driver, or a driver without enough insurance to cover the damages. These policies usually cover bike and pedestrian accidents; and, pay for property damage and/or bodily injury caused by another motorist not carrying liability insurance. Many experts think this coverage essential given the prevalence of uninsured drivers nationally. You should get the same amount as you would for bodily injury liability, which, on average, costs about $40 a year for $100,000 worth and will make up for anything your medical insurance doesn’t cover.

Personal Injury Protection coverage pays medical and/or funeral costs for you and your family resulting from an accident regardless of whose fault it was. It’s not necessary if you hold separate health, life and disability policies. If that’s the case, skip this one altogether because these types of expenses are probably already covered. If you’re not sure, go get those policies and start reading.

Most insurance companies will try to sell you any number of policy extras to go along with the essentials. You are not obliged to take these extras and many aren’t even worth it. Rental reimbursement, for instance, pays a measly per diem amount while your car is being repaired after an accident. Not only is the rental reimbursement usually small and the odds you’ll need it just as remote, its limit is often tapped out even before repairs are completed, or before you’ve found a suitable replacement in the event your vehicle was written off. You have better odds that the other motorist will be at fault, in which case their insurance will pay for this.

Another extra is towing roadside assistance coverage, which pays to tow your vehicle to a dealer or repair shop. At $20 to $25 or more per year, your money would be better spent on AAA or some other auto club membership if you’re not already one.

One extra that is exponentially more useful, however, is full glass coverage. Be sure to ask about it because broken windshields are common and expensive to replace. Plus, you never know when one of the neighbors kids will foul off a pitch into your back seat.

Top Auto Insurance Providers

« Back
SWEEPSTAKES – OFFICIAL RULES, TERMS AND CONDITIONS’s Monthly Overlay Newsletter Signup – By subscribing to our email newsletter, Entrants are eligible to win one (1) Gift Card (value of $100.00 USD). One (1) winner will be chosen every month at random and contacted by VerticalScope Inc.’s staff. * is not a sponsor of this promotion. Except as required by law, Gift Cards ("GCs") cannot be transferred for value or redeemed for cash. GCs may be used only for purchases of eligible goods at or certain of its affiliated websites. For complete terms and conditions, see GCs are issued by ACI Gift Cards, Inc., a Washington corporation. All Amazon ®, ™ & © are IP of, Inc. or its affiliates. No expiration date or service fees.


2. PRIZE: One (1) Winner will be randomly selected every month to each receive: one (1) $100.00 Gift Card (the “Prize Supplier”). Total approximate retail value of all prizes is approximately $100.00 USD. Prizes are not transferable and no cash or prize substitution is allowed. Prize package is awarded "as is" with no warranty or guarantee, either express or implied.

3. ELIGIBILITY: From the time of entry through the final date of prize fulfillment, each contest entrant and selected entrant must be a permanent lawful citizen and resident residing in the 50 United States or the District of Columbia or in Canada, and be twenty one (21) years of age or older. VOID IN PUERTO RICO, THE U.S. VIRGIN ISLANDS, IN ALL FOREIGN COUNTRIES OUTSIDE OF THE UNITED STATES, AND ALL OTHER U.S. TERRITORIES OR CANADA AND POSSESSIONS AND WHERE PROHIBITED OR RESTRICTED BY LAW. Employees, officers, directors, agents and representatives, of the Sponsor and the Prize Supplier and each of their respective parent companies, affiliates, subsidiaries, advertising and promotion agencies, promotion partners and any entity involved in the development, production, implementation, administration or fulfillment of this Sweepstakes, and the immediate family members (e.g., spouse, mother, father, sister, brother, uncle, aunt, nephew, niece, grandparent, in-law, daughter and son, regardless of where they live) and persons living in the same household (whether or not related) of such individuals are not eligible to participate or win. Only one selected entrant per household. All decisions of the Sponsor with respect to this sweepstakes are final. The Sponsor shall have the right at any time to require proof of identity and failure to provide such proof may result in disqualification from the Sweepstakes.

4. ENTER BY INTERNET: You may enter this sweepstakes via the Internet by logging onto and subscribing to our email newsletter via the pop-up overlay.

5. SELECTION OF WINNER: One (1) Entrant will be selected by random selection who have subscribed to our email newsletter. The winner may be announced publicly on and will be contacted by VerticalScope Inc.’s staff. The winner will be required to provide a mailing address (that is not a P.O. box) to receive the prize which will be shipped free of charge.

6. ODDS OF WINNING: Odds of winning a prize are determined by the total number of eligible entries received.

7. RESTRICTIONS: The prize package consists of one (1) Gift Card with an approximate value of $100.00 USD. If prize cannot be awarded due to circumstances beyond the control of the Sponsor or Prize Supplier, no substitute prize will be awarded due to the unique nature of the prize. Sponsor and Prize Supplier shall not be liable to the winner or any person claiming through winner for failure to supply the prize or any part thereof, by reason of any acts of God, any action(s), regulation(s), order(s) or request(s) by any governmental or quasi-governmental entity (whether or not the action(s), regulations(s), order(s) or request(s) prove(s) to be invalid), equipment failure, utility failure, internet failure, terrorist acts, threatened terrorist acts, air raid, blackout, act of public enemy, earthquake, war (declared or undeclared), fire, flood, epidemic, explosion, unusually severe weather, hurricane, embargo, labor dispute or strike (whether legal or illegal) labor or material shortage, transportation interruption of any kind, work slow-down, civil disturbance, insurrection, riot, or any other cause beyond Sponsor's or Prize Supplier's control (collectively, "Force Majeure Event"). Sponsor shall not be responsible for any cancellations, delays, diversions or substitutions or any act or omissions whatsoever by the performers/events, other transportation companies or any other persons providing any of these services and accommodations to passengers including any results thereof such as changes in services or accommodations necessitated by same.

8. CONDITIONS: By entering the Sweepstakes, entrants agree to be bound by the Official Rules, Terms and Conditions and that Sponsor has the irrevocable right to use in perpetuity entrants' names, user names, likenesses, photographs, voices, home mailing address, biographical and prize information, and entry materials, without notice to entrants and without compensation or obligation, in any and all media now or hereafter known throughout the world, in any manner whatsoever, to advertise and promote Sponsor, its products and services, the Sweepstakes, and for any other purpose except where prohibited by law. Entrant waives the right to assert as a cost of winning a prize any and all costs of verification and redemption or travel to redeem said prize and any liability which might arise from redeeming or seeking to redeem said prize. Sponsor is not responsible for fraudulent calls or emails made to entrants not by the Sponsor. If the Sweepstakes is not capable of running as planned by reason of damage by computer viruses, worms or bugs, tampering, unauthorized intervention, fraud, technical limitations or failures, any Force Majeure Event or any other cause which, in the sole opinion of Sponsor, could corrupt, compromise, undermine or otherwise affect the administration, security, fairness, integrity, viability or proper conduct of the Sweepstakes, Sponsor reserves the right, in its sole and absolute discretion, to cancel, terminate, modify or suspend all or any part of the Sweepstakes, and to select a winner from among all eligible entries received by Sponsor up until the time of such cancellation, termination, modification or suspension, as applicable. Sponsor reserves the right in its sole discretion to disqualify any individual that (i) tampers or attempts to tamper with the entry process or the operations of this Sweepstakes in any manner, (ii) violates the Official Rules, Terms and Conditions or (iii) acts in an unsportsmanlike or disruptive manner, or with intent to annoy, abuse, threaten or harass any other person. CAUTION: ANY ATTEMPT BY AN ENTRANT OR ANY OTHER INDIVIDUAL TO DELIBERATELY DAMAGE OR UNDERMINE THE LEGITIMATE OPERATION OF THIS SWEEPSTAKES IS A VIOLATION OF CRIMINAL AND CIVIL LAWS. SHOULD SUCH AN ATTEMPT BE MADE, SPONSOR RESERVES THE RIGHT TO SEEK CIVIL AND/OR CRIMINAL PROSECUTION AND/OR DAMAGES FROM ANY SUCH PERSON TO THE FULLEST EXTENT PERMITTED BY LAW. Any expenses and receipt and use of the prize and federal, state and local taxes and fees applicable in connection with the prize awarded are the sole responsibility of the winner. An IRS Form 1099 will be issued in the name of the winner for the actual value of the prize received. This Sweepstakes is subject to all federal, state and local laws of the United States. VOID WHERE PROHIBITED. Sponsor, Prize Supplier, and their respective officers, directors, parent companies, affiliates, subsidiaries and advertising and promotion agencies, employees, representatives and agents are not responsible for and shall not be liable for (i) any injuries, losses or damages of any kind caused by a prize resulting from acceptance, possession or usage of the prize, or (ii) printing, distribution or production errors. Sponsor or its affiliates may rescind any promotion found to contain such errors without liability at its or their sole discretion.

9. SPONSOR: The Sponsor of this contest is VerticalScope Inc. (the owner and operator of, 111 Peter Street, Suite 700, Toronto, Ontario, M5V 2H1.

Subscribe to our email newsletter and automatically be entered to win.
*Restrictions apply. See offer for details

Get Breaking Automotive News, Reviews and Video in your Facebook Feed!

Already Liked