Most people want to be adequately covered in case of a car accident, but choosing how much insurance to purchase without overspending can be a tricky decision. If you don't have enough coverage, you risk forking out a tremendous amount of cash if you are involved in an accident. If you take all precautions possible, you may be spending money for coverage you may never use. Figure out how much car insurance you really need before agreeing to a policy.
Covering the Basics
There are some aspects of automobile insurance coverage that simply must be factored. Where you live, where you park your car at night, how old you are, how far you drive your car to work and other such basics will determine a large portion of your premium. If you don't have an anti-theft package or if your car is prone to particular damages, you could always consider buying a different vehicle, but spending more money to save on insurance costs may be self-defeating. The absolute lowest-cost, most basic insurance package will need to cover the liabilities involved in these statistically calculated risk factors.
Explore the Minimums
Every state has its own set of laws regarding the minimum insurance required, regardless of circumstance. Prior to working with an insurance agent, you should call your attorney or look up your state's minimum insurance requirements. This will help you to be more knowledgeable going into the agent's office so that you are actively and consciously involved in deciding what you need, rather than being influenced by an agent trying to make a sale. While the insurance agent's expertise can certainly help you to make wise decisions that may go above your state's minimums for very logical reasons, you will still want to be well-informed through more than one source before signing a policy.
Think in terms of what you will do if your car breaks down or has an accident that will put it in the shop for several days or longer. If you have a neighbor who works at the same place you do, maybe you can hitch a ride and this won't be an issue. If you have family whom you are confident will let you borrow their car in such a situation, you probably don't need to spend money monthly on "what if" scenarios. However, if you lack solutions to such scenarios, you will want to add rental reimbursement to your insurance package.
Deductibles are the amount of money you pay on car repairs before your auto insurance policy kicks in. Choosing your deductibles is the single largest decision you will make when figuring out how much car insurance you really need. If you normally have a decent amount of cash saved in a bank account or in an easily accessible investment, you may not need to put much money into a monthly policy with low deductibles. You may feel that your risk of accident is low and even if this situation does occur, you can borrow from your own cash store until your insurance policy kicks in. If you know that you would probably not have a few hundred or thousands to put up-front into car repairs immediately following an accident, it would be wise to add the expense of a larger deductible into your insurance policy package.