Sometimes before even purchasing a car, many people need car insurance. Not only do many laws mandate car insurance, but it is a steal compared to paying for expensive repairs due to accidents. However, many people are either over or underinsured.
You may be wondering ‘How much car insurance do I really need?’ This article will help you make an informed decision on how much car insurance is right for you.
What Is The Minimum?
The first thing that you need to know is what is the minimum amount of insurance that your state requires you to have. This way you can have a baseline for the amount of insurance that you need, and add and subtract from there.
Something else to take into consideration is the situation with your car, especially financing. For example, in Texas it is required by law for drivers with a car note to have full coverage insurance. If your car is paid for in full, then liability insurance is only necessary.
Before purchasing insurance, check your state and local laws to see how much insurance is necessary just to keep your car legal.
How Much Extra Do I Need?
Once you figure out the minimum amount car insurance Colorado you need, the next step is to look at other types of coverage to see if it is a good fit for you.
It is not always easy or clear to know what insurance coverage you need, or even what it means. For example, many people confuse Collision and liability coverage thinking that they are interchangeable. Sadly, it is only until an accident happens that they realize that they are two different coverages and they are left paying out of pocket.
Something else to keep in mind is that coverage does not work for the same person. Maybe your neighbor has a full coverage policy which is costly but she swears by it. This may not work for your budget and you may find that all you need is the minimum coverage.
Or maybe your car is alot older. The premium coverage may not be feasible for you if you don’t plan on keeping the car much longer. On the other hand you may have a brand new or more expensive car. It may be in your best interest to keep more than usual coverage of insurance to pay for costly repairs from accidents.
Another thing is to know the type of driver that you are. If you seem to get into an accident every few years, then extra coverage such as accident forgiveness may be best. If your last accident was in 1992, you may not need such coverage. Every situation and person is different and you should keep that in mind when looking for the perfect insurance.
Keep Realistic Expectations
According to some experts, the average cost of car insurance is about $129 a month. Of course, many factors go into it but you should keep not only this number but your states’ average cost as well and go from there.
You also need to talk with a prospective insurance company and see what they offer and how much it costs. It is also a good idea to keep in mind how much you can realistically pay for your insurance every month. You don’t want to end up paying over half of your monthly income for insurance. It is important to keep in mind that you still have other expenses with your car to take care of as well.
We hope this article has helped you make an informed decision on what type of car insurance is best for your needs.