Find yourself asking “how much insurance do I need for my car?” You’re not alone! In order to drive legally, you need the minimum amount of coverage required by your province, which is known as liability insurance. But you also need enough coverage to protect yourself from financial disaster if you should get into a car accident, and that’s where things get a little more complicated.
Is the bare minimum required by law enough?
Province-required liability insurance isn’t likely to be enough to replace your vehicle, especially if it is fairly new. It’s also not enough to protect you if you have assets in any form. The bare minimum of liability insurance may be adequate if you are driving an old car and don’t yet own many valuable items. If someone takes you to court over an accident, you don’t have assets for them to take.
But if you own your home or any other type of notable asset, you may need more coverage. It’s a good idea to have coverage equal to the total value of your assets if you’re not sure how insurance you need for your car. Otherwise you could lose them to cover property damage liability and bodily injury liability claims.
Liability limits usually show on your policy as a series of numbers, such as 25/50/10. This indicates that if you were in an accident, your insurance would pay up to $25,000 per person, $50,000 per incident, and $10,000 in property damage.
It’s also worth mentioning that insurance policies pay out after you pay the amount of your deductible, so it’s important to set that deductible according to how much you’re able to afford if an accident ever occurred.
Other insurance coverage
Comprehensive coverage protects your vehicle from damage from fire, theft or storms. It is usually fairly inexpensive and is worth investing in no matter how new or old your vehicle is in order to cover this type of damage to your vehicle if it happens. The relatively low cost of covering those potential scenarios is well worth the peace of mind.
Collision insurance protects you if your vehicle is damaged in an accident. You may also wish to purchase additional insurance for uninsured or under-insured motorists to be sure you will be reimbursed after an accident, even if the other party doesn’t have adequate coverage.
You might want to add coverage for a trailer or any other kind of car attachment.
How much insurance do I need for my car if I’m just starting out?
How much insurance you should buy is a personal decision. Whenever costs exceed coverage, you may be held responsible for paying for the remainder. You can lower the cost of your premium by agreeing to pay a higher deductible, but that would mean you would have to pay more out of pocket if you did have an accident.
You will have to decide if your vehicle is valuable enough to purchase coverage to completely replace it if anything happens, or if you’re better off purchasing a less expensive policy and paying more out of pocket later if necessary. Ultimately it comes down to what you can afford over time and what you can afford in a pinch.
It’s a good idea to talk to several different agents to get an idea of the price range of different types of coverage for your vehicle. Once you review your options, you can choose the policy that is best for you. Finding that financial sweet spot is the key to figuring out how much insurance you need for your car.
Explore the coverage options available to you and how much it all costs in 3 minutes. The experts at aha insurance are ready to help you ensure you have proper coverage for your vehicle (or home) online or call us and we’ll be glad to help you experience our vision of the future of insurance.