How Much Car Insurance Cover Should You Have

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How Much Car Insurance Cover Should You Have

Car Insurance is essential, and although each state has it’s own requirements for the amount of car insurance necessary to be permitted to drive on the roads, there are other options which you might not be sure about whether you need them or not. Some people always look on the black side and pay over the top to be covered for the worst case scenario, others are more interested in saving money and might find themselves out of pocket should the worst ever happen.

Essential Car Insurance Cover

  • You must have body injury liability. If you are involved in an accident which is proved to be your fault, this will cover any medical, rehabilitation and (if necessary) funeral expenses for passengers in your car, plus the driver and passengers in any other cars involved, as well as pedestrians. You will need to have adequate cover for around $100,000 per person, around $300,000 per accident, but if you have sizable assets you could increase this to around $250,000 and $500,000.
  • You must also have property damage cover. This covers the replacement or repair of any damage caused to other peoples property by your car. The state requirement is generally only around $25,000, but you might want to increase this to around $100,000.
  • Uninsured driver / under insured driver cover is also essential. This means that if you are involved in an accident with a driver who does not have adequate insurance, your medical bills, rehabilitation, funeral costs etc will be covered. You need around the same amount of car insurance cover as for the body injury liability to be on the safe side.

Car Insurance Cover – Extra Cover You Might Need

  • Collision and comprehension cover is strongly advised. This will cover the cost of repairing or replacing your car, no matter whose fault it was. The price of this cover will be related to the amount of deductible you choose. If you choose the highest deductible which you can possibly afford – at least $500 – then this means that you will have to pay the first $500 in any claim, but this can really reduce the price of your car insurance premiums.
  • Personal Injury Protection (PIP) covers the cost of any in-home care and loss of earnings which are the result of an accident.
  • Medical Payments Cover (or med-pay) covers payment of all medical bills for yourself and your passengers, irrespective of who was at fault in the accident. If you’ve already got good separate health insurance you might not need this extra cover, but it’s always a good idea to have some (maybe $5,000) to cover the costs of any passengers who don’t have adequate health insurance.

Car Insurance Cover – Optional Extras

  • Rental reimbursement – some car insurance policies offer rental reimbursement which typically covers the price of a rental car while your car is stolen or out of action – there’s often a cap of say $30 per day, for a maximum of 30 days while your car is repaired, recovered or replaced.
  • Roadside assistance – will pay for your car to be towed in the event of a breakdown. Some auto-club memberships include this automatically, so only choose this optional extra if you need to.


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