How Much Auto Insurance Do I Need?

Everyone who buys a car asks themselves "How much auto insurance do I need?" - whether it's a brand new sports car, or a beat up but inexpensive used automobile.

When you're shopping for a vehicle, chances are you know what you want. You might want it to be automatic with all wheel drive. Easy on gasoline, with enough room for your family. What about auto insurance? There are so many different types available it may be hard to choose the one that's right for you if you don't know what's available. This will explain some of the most common auto insurance types and what they cover.

The amount of auto insurance you purchase will depend on many factors. Your deductible, type of automobile, and driving record are all factors important in determining your coverage and your premiums. But generally speaking, you should purchase an amount that adequately covers you and your assets. The Insurance Information Institute (III) recommends that you have $100,000 of bodily injury protection per person and $300,000 per accident. They suggest that if you have assets and investments worth more than $300,000, you should consider additional laibility insurance. This will protect you in the case you will have to pay medical and/or legal expenses.

Of course, this is the "ideal" coverage, and if you are looking for cheap auto insurance, you probably won't be looking for $300,000 in coverage!

Like most states, California law requires drivers to carry liability insurance on each vehicle they own.

While the particular requirements vary from state to state, and you'll need to know specifically what auto insurance California requires, here are some of the basic requirements:

• Personal Injury Protection also known as PIP will cover cover medical expenses for you and your passengers if you receive injuries from an accident.
• Uninsured Motorists Coverage will protect you if you are involved in an accident and the person at fault has no insurance or is under insured.
• Property Damage Liability Coverage will cover the cost of any damages to the other person's vehicle if you are at fault for an accident.
• Bodily Injury Liability Coverage will take care of the cost of injuries sustained by people involved in accident where you are at fault.

While some of these auto insurance types are optional. Most states, including California, require that you carry Property Damage Liability and Bodily Injury Liability coverage. You should check with your local insurance agent.

California drivers are required to carry proof of insurance or evidence of financial responsibility in their vehicle at all times. Residents of other states are subject to the same laws.

In California there is a “good driver law” that entitles drivers who have gone for three years or more without an accident or a traffic ticket and have resided in the state for at least 18 months to a discount on their car insurance rates. You may also be eligible for a discount if you are a graduate student, a professional federal employee, or a member of certain professional groups.