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How much insurance coverage do I need?

What to Know
  • Liability, comprehensive, and collision coverages make up full coverage
  • In every state but New Hampshire drivers are required drivers to have at least liability coverage
  • Drivers can shop online to find the best coverage and the best rates

The details of Texas car insurance requirements tend to be the last thing you’re concerned with when you’re cruising down the highway and looking for adventure, but it should be at the forefront of your mind.

“How much car insurance coverage do I need?” is a vital question that every driver should be asking themselves whether they’re shopping for a new policy or when their current one comes up for renewal.

Some drivers try to obtain the cheapest rates they can by cutting their coverage levels down almost to nothing, but that’s a short-sighted approach. Driving without adequate insurance can have devastating effects if you were to be hit by another driver or if you caused an accident yourself.

It’s a good idea instead to spend some time examining your budget, your assets, and the potential replacement cost of your vehicle to find a balance between how much insurance you need and how much you can afford to buy.

If you’re worried that you don’t have enough coverage and want to buy car insurance, “How much insurance coverage should I purchase?” is a question that should guide your shopping procedure, which, with today’s technology, is easier than ever.

With your smartphone or your tablet, you can compare multiple auto insurance quotes and study various coverage levels to find the best policy for you that will keep you safe without draining your bank account.

Enter your ZIP code to get free insurance quotes if you’ve found yourself worrying over the question, “How much insurance coverage is enough to protect me?”

How much insurance coverage do drivers need?

There are quite a few factors that can help you determine how much insurance coverage is enough for your needs, like your assets and your budget.

Now, if you are very concerned with staying within your budget while on the hunt for affordable car insurance, “How much insurance coverage should I carry?” may not be high on your list of concerns while trying to find a policy.

While finding affordable insurance is, of course, a smart idea, you shouldn’t be completely influenced by a low price tag. There are other elements that you’ll need to consider when buying a policy.

For example, if you were zipping down the highway and caused an accident, your insurance coverage would, hopefully, be enough to cover all the damages.

But let’s say that you had decided to lower your limits to score a cheaper rate. You would be personally responsible for anything that exceeded your coverage limits.

So stop yourself before you snap up the cheapest policy you find and consider how much you could afford to pay out of pocket if you caused an accident, and you should also consider, “How much insurance coverage do I need to protect my car?”

Your insurance policy does more than just protect you from other drivers who might try to sue you for damages. It can also help you protect your vehicle.

For instance, if you wanted to have a picnic and parked your car under a shady, old tree only to have one of its branches plummet straight through the roof of your car, you’d be covered if you had full coverage insurance.

Full coverage would enable you to get the repairs you need; however, when you have full coverage, you’re protected for more than fallen tree branches.

Full coverage is made up of three coverage types that can keep you safe from all kinds of threats. These coverage types are:

  • Liability Coverage
  • Comprehensive Coverage
  • Collision Coverage

Each one of these coverage types has a specialized role, so let’s examine what each one can do for you and your car.

Liability Coverage

Liability coverage will cover medical bills and car repair costs by people that you may have injured in an accident. Bear in mind that once you hit your coverage limit, you could be responsible for everything over that dollar amount.

If you can, you should have your liability limits set to 100/300/100 at the very least. With those limits, you would have $100,000 per injured person, $300,000 per bodily injury per accident, and $100,000 for property damage.

This is a great example of why having car insurance is so important. Most drivers don’t have a spare $300,000 lying around; however, with a relatively small monthly payment, you’ll have access to a lot of coverage if you should ever need it.

You should also be aware that it is illegal to drive in the United States without liability coverage. New Hampshire is the only exception to this rule. Now, if you’re unsure what the liability requirements are in Texas, you can reach out to local resources to ascertain how much coverage you need.

Comprehensive Coverage

Comprehensive coverage serves as a security blanket for your vehicle. You can rest easy with the knowledge that your car is covered from damages caused by threats like these:

  • Storms
  • Hail
  • Theft
  • Fire

Unlike liability coverage, comprehensive coverage isn’t required by the states. Of course, drivers who have a loan or lease their vehicle could be required to purchase comprehensive coverage.

If you own your car outright, you can choose to buy or skip comprehensive coverage. While an older car may not be worth the cost of comprehensive coverage, if you’ve just bought a brand new car, it’s in your best interest to make sure that it is fully covered.

Collision Coverage

Collision coverage is very important because this type of coverage helps you afford repairs and can even help you replace your vehicle. This coverage comes into play if you hit an object or another person’s car while driving.

Like comprehensive, collision coverage isn’t a required coverage. Don’t skip collision just because the law doesn’t require it, though. If you don’t think that you could easily afford to replace your car after an accident, you should make sure to carry collision coverage.

Like comprehensive, collision coverage will be required if you have a loan or lease.

Do drivers have to purchase car insurance?

Driving without insurance is illegal, and doing so can bring about dire consequences.

At the very least, you could be fined or lose your license, which in many areas of the United States could be devastating if you drive to work. Without access to reliable public transit, being stuck without a license could cause a whole slew of problems.

You could even be sent to jail. So as you can see, even if driving without insurance pads your pockets, it is not worth the risk at all.

How much does car insurance cost?

If you were to ask a car insurance company, “How much insurance coverage should I buy?” you would likely be told to buy a little more than you think you need for some added protection. Bearing that in mind, it’s no surprise that car insurance can end up costing a pretty penny.

You could, on average, pay near $3,861 per year for a medium amount of coverage, but car insurance rates will not be the same for any two drivers. This is due to the fact that insurance companies send each driving through an underwriting process that examines:

  • Your car’s make and model
  • Your car’s age
  • Your driving history
  • Your credit score
  • Your coverage limits
  • Your address
  • Your deductibles
  • Your age
  • Your gender

Drivers on a budget who ask themselves, “If I need low car insurance rates, how much insurance coverage can I get?” should take a look at this chart that displays the annual rates some major insurance companies offer for a range of coverage amounts.

Here you’ll be able to see how much you might pay for insurance and see how much coverage you can afford:

Group High Coverage Annual Average Medium Coverage Annual Average Low Coverage Annual Average
Allstate $5,655.81 $5,438.89 $5,361.24
American Family $5,357.52 $4,672.73 $4,517.27
GEICO $3,477.68 $3,221.75 $3,090.73
Nationwide $3,736.52 $3,701.00 $4,165.19
Progressive $4,920.90 $4,642.33 $4,431.31
State Farm $3,039.86 $2,870.49 $2,729.50
USAA $2,582.94 $2,477.96 $2,403.46

While the rates for full coverage are without a doubt higher than the rates for just liability, you must realize that the benefits of full coverage include greater protection for you while you’re on the road.

Insurance Coverage: What You Need to Know

When you are trying to figure out how much insurance you need, you should have least have your liability coverage set at 100/300/100, but there is no hard and fast rule for your comprehensive and collision coverage as it will be influenced by the type of car of you drive.

Driving without insurance is illegal, but you should be sure to buy insurance that you can afford.

If you’re asking yourself, “Where can I find car insurance quotes, and how much insurance coverage do I need?” you can start comparing car quotes right away.

Enter your ZIP code to get free insurance quotes from companies near you that can help you find the answer to: “How much insurance coverage is adequate?”

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