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3 Reasons To Buy More Than Minimum Coverage For Auto Insurance

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Nearly every state has a minimum amount of liability insurance coverage that drivers are required to purchase. While getting this basic coverage seems like a smart bargain, going with only the state-mandated minimum liability coverage for your auto insurance could prove expensive in the long run. Here are 3 good reasons why you should consider buying more than the state minimum coverage.

#1: An Accident Can Easily Exceed the State-Mandated Minimums

The state-mandated minimums for most states are designed to help make auto insurance more affordable while giving drivers adequate protection under most circumstances. Nevertheless, it's not out of the ordinary for costs stemming from an auto accident to exceed state minimum coverage amounts. When this happens, you could be on the hook for any additional costs that exceed your liability coverage limits.

To protect yourself against any financial burdens, it's a good idea to bump up your liability coverage limits. Most experts recommend having the following liability coverage amounts:

  • $100,000 in bodily injury coverage per person and $300,000 per accident
  • $100,000 in property damage coverage per accident
  • $100,000 in uninsured and underinsured motorist coverage

#2: Additional Coverage Can Cover Repairs to Your Own Vehicle

Although your liability coverage will take care of any damage done to the other driver's vehicle in the event of an accident, it won't cover damage caused to your own vehicle. You may be able to count on the other driver's insurance to pick up the tab for any damage done to your vehicle, but only if the other driver is found at fault. Otherwise, you'll be left to pay for repairs out of your own pocket unless you have collision and/or comprehensive coverage.

With collision coverage, your auto insurance provider will pay to repair your vehicle after an accident and even replace it if it's totaled. Comprehensive coverage takes care of damages caused by fire, water damage, theft and other events. Both coverages require you pay a deductible before the insurer steps in to cover the rest.

#3: Leased or Financed Vehicles Often Require Additional Coverage

Most auto leasing and financing agreements require buyers to purchase additional auto insurance coverage for their leased or financed vehicles. The rationale for this is quite simple -- lenders want to recoup their assets in the event of an accident that results in a vehicle loss.

Such additional coverage may include gap insurance, which makes up the difference between the amount owed on the loan or lease and the vehicle's actual value paid by your auto insurance provider at the time of the accident. This additional coverage keeps you from being "upside down" on your auto loan or lease after an accident.


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