How Much Does Car Insurance Cost?

How Much Does Car Insurance Cost? How Much Do I Require?

When purchasing automobile insurance, it is usually suggested that you get liability coverage limits equal to your estimated net worth.

Your vehicle insurance policy's liability coverage compensates you for bodily harm and property damage you cause to others in an accident.

How Much Does Vehicle Insurance Cost?

Scroll down to see the average cost of vehicle insurance coverage in your state, or use the form below to get a lower auto insurance quote:

Get The Best Auto Insurance in your Location

We examined data from state insurance departments and discovered that yearly rates are rising in the majority of U.S. states. The average cost of vehicle insurance coverage for car owners has usually risen, except for Arkansas, Georgia, North Carolina, and Virginia.

These car insurance estimates for certain states will provide you with a decent approximation of the annual average cost of vehicle insurance.

Is A Basic Vehicle Policy's Minimal Liability Coverage Amount Sufficient?

The minimum amount of vehicle insurance coverage needed by law varies based on where you reside. It is not, however, the amount of liability coverage you should carry. An accident's total cost might surpass the liability coverage limitations on a driver's insurance.

When this occurs, the driver's personal assets are exposed and can be taken in a lawsuit to pay for the remainder of the claim, particularly if your net worth exceeds the damages claimed.

Patti Clement, first vice president of HUB International in New York, advised on auto insurance coverage as follows: "Make certain that you get the right liability coverage, not the bare minimum. If you are in an accident and have split limits and inadequate coverage, you will be out of pocket for any losses that exceed those limitations for physical injury and property damage."

How Much Liability Coverage Should I Have On My Auto Insurance Policy?

, "I tell potential customers to purchase as much liability coverage as they can afford, preferably in excess of their whole assets and then some," said Kristofer Kirchen, president of First Florida Insurance Network in Central Florida. "This is because, regardless of your possessions, you have no influence over who is wounded or the amount of that injury."

Is there extra place in your budget for increased auto insurance coverage? It is difficult to predict what incidents may occur and how much danger you will be exposed to. It is, however, simple to limit that exposure to the whole sum of your estimated net worth, which acts as a standard for appropriate auto insurance coverage.

Calculate the worth of your home, vehicles, investments, retirement accounts, banking accounts, and any other assets, minus your total debts and obligations, to calculate your recommended auto insurance liability coverage. If you want to have a lot of security and can afford it, you may get even more coverage limitations.

Motorists are obliged by law to have statutory liability insurance or evidence of financial responsibility (in certain states). "If pressed, I would suggest that if they can't afford more, they should purchase at least 25/50/25, but I emphasise that individuals should buy as much as they can afford," Kirchen said.

Look no further if you want to know what the minimum auto insurance coverage requirements are in your state. Three figures are shown under "Car Insurance Coverage Requirements" in the table below. The first two numbers refer to bodily injury liability standards, while the third refers to property damage coverage limitations.

In Alabama, for example, $25,000/50,000/25,000 implies that the insurance company will pay for injuries to each individual involved in an accident up to a maximum of $25,000 apiece or total injuries up to $50,000 per accident. Furthermore, the insurance will pay up to $25,000 per accident (the third figure) in property damage.

*Car insurance is not required in New Hampshire, but if you choose to acquire it (or were forced to), these are the minimal requirements.

As Kirchen points out, it is preferable to spend a few hundred dollars each year for the benefit of recommended vehicle insurance coverage than to lose a few hundred thousand dollars over the course of a lifetime.

. Now that you have a clearer concept of what constitutes adequate liability vehicle insurance coverage, begin researching which auto insurance companies can supply it at the most affordable prices.

Enter your ZIP code below to see a list of the best auto insurance in your area.

An Illustration Of Insurance Compensation For Liability Claims

Let's use a hypothetical event in New Jersey to demonstrate the notion of appropriate or recommended liability vehicle insurance coverage. In the Garden State, the minimum liability automobile insurance coverage level is 15/30/5:

The maximum payment for physical injury is $15,000 per individual, with a maximum payout of $30,000 for injury expenses to those involved in the accident and a $5,000 reimbursement for property damage caused by the accident.

Assume you collide with another vehicle carrying a driver and a passenger. The driver and passenger in the second automobile have been critically hurt, and their vehicle has been severely damaged. Both the driver and the passenger will file third-party claims for the following:

•$25,000 in physical harm compensation for the driver

•$10,000 for bodily harm to the passenger

•$6,000 in car property damage to the driver

Under the terms of your basic auto insurance policy, your insurer will pay the maximum coverage limit. Your insurer will pay $15,000 in personal injury liability for the driver, $10,000 in bodily injury liability for the passenger, and $5,000 in property damage liability under your 15/30/5 plan. The following are the extra charges that are not covered by your vehicle insurance policy:

•$10,000 for the driver's extra medical treatment, and

•$1,000 to fix the car

The opposing party might go after the rest of your assets to make up for the unpaid balance. "If you do not have the necessary limitations," Clement warns, "the balance from your coverage is taken, and you will have to pay that out of pocket - including garnishing your salary or income for the rest of your life."

What Is The Difference Between Property Damage And Bodily Harm Liability? What Is The Appropriate Level Of Protection?

Property damage liability coverage will cover the expenses of repairing and replacing damaged houses, stores, cars, and other stationery items. The cost of fixing or obtaining original equipment manufacturer components might vary greatly depending on whether the vehicle is worth $10,000 or $100,000.

Bodily injury liability insurance will pay for medical treatment, emergency services, lost income compensation, and even burial expenses. Claims made under bodily injury liability coverage are influenced by a variety of variable circumstances, which, as Kirchen stated, can vary greatly:

The Damaged Third Party's Skill Level

Is the other driver a low-wage worker or a highly trained neurosurgeon? The other party is compensated for lost income under bodily injury responsibility.

The Nature Of The Other Driver's Injuries

Were there minor bruising and scrapes, a serious head injury, a limb loss, or nerve damage? An accident might have a negative influence on a person's livelihood and earning ability.

"There is a significant difference between bumps and bruises and a brain injury or loss of limb or nerve damage in a hand," Kirchen stated, "all of which can significantly impede the aforementioned neurosurgeon's work."

The Wounded Person's Age

A young professional still has many years of substantial earning potential ahead of him or her that the accident may have harmed, but an older individual may be getting ready to retire and so won't suffer as much revenue loss.

Liability Coverage For Physical Harm And Property Damage Is Advised.

We generally recommend having an amount equivalent to your net worth because claims for property damage and bodily liability coverage can vary considerably based on the drivers and cars involved in the collision

To calculate your net worth, add your assets and divide the entire amount of debt by the total amount of assets. If your net worth is less than your state's minimal standards, you might consider purchasing the minimum standard liability coverage.

What Exactly Is An Umbrella Policy? Should I Include It In My Auto Insurance Coverage?

A personal umbrella coverage compensates for damages that exceed the limits of your vehicle insurance policy. If you have a large net worth, an umbrella policy provides adequate vehicle insurance coverage. If you have a modest net worth, you generally don't need umbrella insurance because it's rare that a claimant will suit you for damages that surpass your whole asset base.

Excess liability coverage is typically provided in the form of combined single coverage limitations, which do not include a defined sum for bodily injury or property damage like a normal vehicle insurance policy provides. Coverage begins at $1 million and maybe increased in million-dollar increments.

The greatest benefit of an umbrella policy is the return on additional premium. Adding an umbrella premium might cost a few hundred dollars per year, but you'll obtain a $1 million asset cover. Umbrella insurance is advised if you can afford it and have assets to protect.

In order to qualify for umbrella insurance, you must generally have a policy with the maximum split limit. At Geico, for example, your vehicle insurance coverage must be limited to $300,000 for bodily injury and $100,000 for property damage. Other insurers' criteria may differ.

The Following Are Some Examples Of Vehicle Insurance Coverage Provided By An Umbrella Policy:

Pile-Ups

In a multiple-car incident, the basic auto insurance coverage can only do so much. "Most individuals are unaware that if they are in an accident and hit numerous automobiles or hurt multiple persons, the basic auto coverage has a maximum. That is why it is advisable to have an umbrella coverage that extends beyond these restrictions "Clement said.

Earnings Loss

If a neurosurgeon is out of work for six months due to an accident, you may be liable for their lost pay. A surgeon earns an average of $775,968 per year, according to the 2012 MGMA Physician Compensation Report. Their lost wages totaled $387,984 for the six months they were recovering

The lost pay alone would have wiped out your maximum insurance with about $88,000 out of pocket, assuming you got Geico's top level of protection and not accounting for the expense of medical treatment. In this situation, umbrella insurance might shield you from having to pay the additional losses, especially if you have a high net worth.

What Types Of Vehicle Insurance Should I Have?

In addition to bodily injury and property damage liability coverage, a basic full-coverage automobile insurance policy may contain additional popular coverages. Comprehensive and collision coverage, personal injury protection (PIP), medical expenses, and uninsured/underinsured motorist coverage are among the typical vehicle insurance coverages.

While liability vehicle insurance is required in all states except New Hampshire, these supplementary coverages are frequently suggested for many drivers. PIP and uninsured motorist coverage are, in fact, routinely mandated in many states. Each of these forms of vehicle insurance coverage is briefly described here, along with when you should acquire them.

We usually advise drivers to get collision and comprehensive coverage on their insurance, especially if their automobile is worth more than $2,000. Deductibles for collision and comprehensive coverage are typically no more than $2,000, so having this type of car insurance coverage is advantageous if the value of your vehicle exceeds this amount.

Importantly, collision and comprehensive coverage vary from personal liability in that it protects actual damage to your vehicle, whereas personal liability protects you from claims made by a third party in the event of an accident.

While having collision and comprehensive coverage will increase your annual premium, the costs of an accident can quickly climb. Even if a car sustains only $5,000 in damages in a collision claim, the amount is likely to be higher than what you would have saved by paying for the coverage and the deductible.

Uninsured and underinsured motorist coverage is needed in around half of the United States and is generally less expensive than other forms of coverage. According to the Insurance Research Council (IRC), one out of every eight drivers in the United States is uninsured.

Because being involved in an accident with an uninsured driver can be costly, and the resulting damages would not be covered by your liability coverage, we usually recommend purchasing uninsured/underinsured motorist coverage at a value comparable to your bodily injury and property damage liability coverage limits.

If your state does not require personal injury protection (PIP) or medical payments coverage, you may choose to forego either if your health insurance policy covers vehicle accidents.