How Much Auto Insurance Do I Actually Need?

When searching for auto insurance, it is important to consider how much coverage you need for your vehicle. Coverage needs can vary driver to driver and person to person, so a policy that fits your neighbor may not work for you. 

What Auto Insurance is Required? 

Auto insurance requirements vary state to state. Most states require liability insurance coverages to protect people on and off the road in case someone else causes an accident. If a driver causes a collision, for example, liability insurance can help cover the injuries and property damage they cause to someone else. 

In Virginia, all drivers must carry at least: 

  • $25,000 in bodily injury liability per person 
  • $50,000 in bodily injury liability per accident 
  • $20,000 in property damage liability 
  • $25,000/$50,000 in uninsured motorist bodily injury per person/per accident 

This requirement means that you must carry this auto insurance to drive legally on the road in the state of Virginia. If you are caught driving without insurance, you could face a variety of repercussions such as: 

  • Fines 
  • License suspension 
  • Vehicle impoundment 
  • Arrest/jail time

Keep in mind that auto insurance requirements only refer to how much insurance you are legally required to have and not necessarily how much coverage you should carry. 

On its own, liability insurance only covers damages and injuries you cause someone else while driving. It will not cover damages to your own vehicle or injuries you may suffer after an accident. This is why full coverage is generally recommended for most drivers. 

Full coverage may be required for new vehicles by a dealership, as well, so be sure to ask about requirements. You may be required to have auto insurance before driving off the lot. 

What is Full Coverage Auto Insurance? 
Full coverage auto insurance refers to the highest amount of insurance you can have on a single vehicle. There is no set policy titled “full coverage,” as coverage limits can vary depending on the vehicle’s value and the limits offered by your insurer. 

In general, however, a full coverage auto insurance policy should include: 

  • Comprehensive Coverage: Comprehensive coverage provides compensation for damages to your vehicle caused by fire, wind, hail, lightning, smoke, theft, vandalism and other incidents not involving collision. 
  • Collision Coverage: Collision coverage provides compensation for damages to the vehicle caused by a collision with another vehicle or object. 
  • Liability: Liability insurance covers bodily injury and property damage you may cause someone else while operating the insured vehicle. 
  • Medical Payments Coverage: Medical payments coverage provides coverage for medical bills you and your passengers may face after an accident, no matter who is at fault. 
  • Uninsured/Underinsured Motorist Coverage: This insurance covers damages incurred in an accident involving another driver who is not carrying insurance at the time of the accident. 
  • Roadside Assistance: Roadside assistance covers expenses related to trip interruptions such as running out of gas or needing to be towed. 

Additional coverage options may be available depending on your insurer, so be sure to shop around, compare quotes and ask your insurance agent about coverages you may want to add to your policy. 

Auto insurance policies also vary when it comes to coverage limits and deductibles.  

You can choose higher limits of liability than the minimum requirement, for example. This is often a good decision for many drivers, as liability can help cover expensive lawsuits that arise due to accidents which may not be completely covered under minimum auto insurance liability. 

Choosing Your Deductible 
Another important factor is choosing the right deductible. Your deductible is how much you must pay our of pocket after an accident. For example, if a collision costs $2,500 in damage to your vehicle and your collision coverage deductible is $500, you may pay $500 toward expenses before receiving compensation for the remaining $2,000. 

Choosing a higher deductible may save you money on monthly premiums, but it may also cost you more money out of pocket after an accident. 

Do I Need Full Coverage on an Older Car? 
If your vehicle is older with little value and you no longer require full coverage due to a dealership, you may be able to lower your auto insurance coverage to save money. This is generally only recommended if the value of your vehicle has dropped below the cost of replacing it in case of an uncovered accident. 

When in doubt, speak with an insurance agent. They can help you evaluate your auto insurance needs and pair you with the right coverage. 

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