Not having enough car insurance coverage is a dangerous game to play, because when you really need your car insurance company to cough up the funds to cover you in the event of a car accident, you could come up short and have to cover the difference on your own.  Just like not having health insurance coverage can cause people to be indebted for life if their health takes a turn for the worse and they require extensive medical care, so too can a car accident cause so much property damage and personal injury that you can be sunk financially if you don’t have proper coverage.

First off, what type of auto insurance coverage do you really need and have to have?  In most states the requirement is at least liability coverage, which covers bodily injury and property damage.  The amounts required for each vary state by state.  And if you finance or lease your car, you will most likely need collision coverage (replaces or repairs your car in the event of an accident) and comprehensive coverage (fire, vandalism, theft, or natural disaster) as well.

For collision and comprehensive car insurance coverage, you may actually be able to drop them once the car is all paid off and the value of it decreases.  The way to determine whether or not this is a smart move is if the sum of your premium and your deductible are close to or exceed the worth of your vehicle.  If you are able to get rid of collision and comprehensive, this will cause a great reduction for you in monthly premiums.  It’s also a smart strategy to have your deductible set as high as you can possibly afford.  This will also lower your monthly premium.

Having enough car insurance coverage can offer some real peace of mind.  One of the main factors that you need to consider beyond obtaining that which is necessary by law is how much liability coverage you need to protect your assets.  For property damage liability it is a good idea to have at least $50,000 in coverage per car, and even better to have $100,000 per car (what if you hit a very expensive car and total it?).  As far as bodily injury liability, it is very wise to go all the way up to $100,000/$300,000 (which is a coverage of $100,000 per person that you cause harm to and up to $300,000 per accident).

In the end, it’s smartest rather than just trying to get cheap car insurance, to make sure you have the adequate car insurance coverage that will make you the most secure and fulfill your needs so that your financial requirements are met in the event of a worst case scenario.  After all, that is the purpose of being insured — to take care of those costs that you wouldn’t be able to on your own in an unfortunate turn of events.  Having to deal with just the mental and emotional upsets can be more than enough.