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Car Insurance 101 – Why State Minimum Coverage May Not Be Enough

No driver can afford to be without automobile insurance, but it can be difficult to know how much coverage you really need. These days most states require that all drivers purchase car insurance, and in states where coverage is mandated there is a minimum coverage threshold that must be met. Many drivers assume that this state minimum coverage is enough, but in many cases that level of protection is completely inadequate. It is therefore important for every driver to evaluate his or her own insurance needs in order to determine the best level of coverage for liability, property damage and other insurance categories.

Why the Minimum

When states pass laws mandating that every driver carry automobile insurance they need to consider a number of factors, but affordability is often near the top of the list. If the state legislature is going to force people to purchase a product or service they need to make sure that product or service will be affordable. For this reason many states set the bar very low for car insurance coverage. This low bar makes policies more affordable, but it also leaves many drivers without the protection they really need.

For that reason it is important to look at your own state’s minimum coverage levels and determine if those levels really provide adequate coverage. If for instance your state requires that you carry only $10,000 in property damage insurance, what happens if you total your neighbor’s brand new Porsche 911? If you do not have enough property damage insurance in place you could be on the hook for the rest of the damages. The same is true of personal injury – it is important to take a realistic look at the minimum coverage levels set by your state and determine whether or not they are truly adequate for your needs. The more you have to protect the more insurance coverage you will need.

The Low Cost of Upgrading

Many drivers simply assume that upgrading an existing car insurance policy from the state mandated minimum coverage levels to something more realistic will be prohibitively expensive, but that is not necessarily the case. In many cases drivers can upgrade from the minimum set by their state to $300,000 worth of coverage or more for only a small increase in their premium levels. Upgrading coverage can be extremely affordable for those considered to be good risks, but even those with a few black marks on their driving records are often surprised at just how affordable that extra coverage can be.

Reviewing your car insurance coverage on a regular basis is the best way to make sure you are providing adequate protection for your car, your family and your personal property. By knowing the legally required coverage levels and adjusting those levels to suit your own needs you can save money on your premium without sacrificing the protection you need.