Do You Have Enough Auto Insurance Coverage?

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In order to be able to drive a car legally, we need two things: a driver’s license and auto insurance.

To get the driver’s license, all we need to do is a pass a test. To get auto insurance, all we need to is to go online, do some research, crunch some numbers and choose an insurance company to sign up with. Pretty simple, right? As long as we follow our state laws, we’ll get the coverage we need at rates we’re happy with. But we shouldn’t base our insurance coverage on what our state suggests, and here’s why.

Will You Be Covered After an Accident?


Every state in the U.S. requires their drivers carry an auto insurance policy. However, each state only sets a minimum amount of coverage, and the minimum amount might not be enough to protect you after an accident. Consider liability car insurance for a moment. Liability insurance offers bodily injury and property damage liability coverage in the event that YOU cause an accident. This means that a determined dollar amount will be awarded to the person you hit to cover their injuries and property damage. Liability car insurance will not cover any damages sustained to you or your vehicle in an accident you have caused. Because of this, you will be paying for your own medical bills and car repairs out of pocket.

A majority of states in the U.S. have made liability insurance mandatory by law, and as such many Americans do not have enough insurance coverage. The Department of Motor Vehicles (DMV) recommends that motorists take out more car insurance than is recommended by their state. The Rocky Mountain Insurance Information Association (RMIIA) reports that in 2013 (the most current data) the average bodily injury liability claim was over $15,000, with the average liability claim for property damage coming to over $3,000, and it doesn’t stop there. RMIIA further found that the combined total of comprehensive and collision claims came to over $4,000.

Look at this way, altogether, one accident could cost over $20,000 in repairs and medical bills. If you only have liability insurance, you could be paying this amount out of pocket to cover your expenses. Do you have $20,000 readily available? According to MarketWatch, the average American has less than $1,000 in savings. If you’re like the average American, this does not leave you with enough money to make the need repairs to your car.

What Type of Coverage Should I Get?


Now that we’ve learned that liability car insurance does not provide us with enough coverage, what coverage plans out there will?

First and foremost, you should look into getting a full coverage auto insurance plan. Full coverage plans include liability, collision, and comprehensive coverage. When you have a full coverage car insurance plan, your insurance will cover your claim regardless of whether or not you were at fault in the accident. On top of a full coverage plan, you can bundle other insurance policies with it, getting even more coverage! Other coverage plans include:

  • Medical Payments Insurance
  • Emergency Road Service
  • Uninsured Motorist Protection
  • Underinsured Motorist Protection
  • Gap Insurance
  • Rental Reimbursement
  • Towing Reimbursement

And when you bundle your car insurance, you are immediately eligible for an insurance discount.

Don’t look at car insurance as just another requirement to satisfy. Look at car insurance as a metaphorical emergency medical kit when you’ve been involved in a collision. After an accident, you’ll want to know that you’re protected. Full coverage car insurance will protect you at your worst, and bring you back to your best.

Photo courtesy of: fignetto

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Kayla is a mid-20s single girl living in the Midwest, USA. She is focused on paying off her consumer and student loans, while simplifying her life and closet. You can join her on her journey at or follow her on Twitter @shoeaholicnomor.

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