Car Insurance – How Much is 'Enough'?
As an insurance agent, I am sometimes asked how much car insurance is 'enough'. This question is nearly impossible to answer, and may depend on the type and age of your car, as well as the assets you want to protect.
Regarding the car itself, you can choose collision and/or comprehensive coverage, with various deductibles. Once your car has declined significantly in value, you may want to consider eliminating collision coverage. If your car is worth $750 and you have a $500 deductible, the most you would ever get is $250 in the event of a claim. If it's costing you $300 a year for the collision coverage, then you're going to lose money! Comprehensive coverage is generally less expensive, and often will cover your windshield replacement free of charge, so many people retain this coverage, even on an older vehicle.
When it comes to liability limits, you want to make sure you carry high enough limits to protect your assets. Particularly in the area of Bodily Injury to Others. If you own a home, or have other significant assets, you may want to carry at least $100,000 per person and $300,000 per accident, or even $250,000/$500,000. Even if you are just starting out, and have not accumulated any assets yet, you want to protect your future assets as well!
When making decisions about your coverage, always talk to your insurance agent. They probably know you, and can take some time to ask you the right questions, so that they can help you make informed coverage decisions.