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How Much Car Insurance Is Enough?

When you drive, you understand the risk of getting into a car accident. There were 6,756,000 police-reported crashes in 2019 alone. Unfortunately, accidents happen, which is why you are required to have car insurance to operate a vehicle on the road in most states

When the accident isn’t your fault, a good attorney can help you gain the compensation you deserve. But, having the right amount and type of auto insurance is the best start to making sure you are covered, regardless of the circumstances. 

When you’re behind the wheel, car insurance is as synonymous with safe driving as fastening your seatbelt. There’s an understanding that at-fault drivers have a financial responsibility to pay for damages they cause to other drivers.

Car insurance is also a massive business, evident in the countless commercials, sponsorships and advertisements you see daily. You hear terms like “coverages,” “rates” and “deductibles” thrown around without much explanation.

The constant noise may cause you to ask questions like:

  • “If everyone’s required to get insurance, why would I care what kind I have?” 
  • “How much car insurance is enough?”
  • “Shouldn’t I just get the minimum required insurance and move on?” 
  • “I’m a safe driver! If someone hits me, shouldn’t their insurance cover my expenses?”

This line of thinking may be enticing if you’re trying to save money on your monthly bill. However, the best protection against an accident is your own insurance. 

If someone hits you and is only carrying liability insurance, their policy may not cover the full extent of the damages you receive. If you’re unlucky enough to be hit by an uninsured driver, your insurance company is the only way to get immediate help to repair your vehicle and pay for medical expenses.

State-required insurance is a starting point, but it may not be enough to protect you from the array of damages that you and your vehicle can receive. 

How Much Car Insurance Is Enough?: Learning the Different Types of Car Insurance

Whether you’re updating a current policy or getting a new one, you need to know what types of coverage exist and which ones are right for you.

All insurance companies use different verbiage in their policies, so it’s essential to review your policy carefully to make sure you understand your coverage.

Here are a few basic types of car insurance coverage:

Mandatory Coverage

Liability Coverage

Liability coverage is essential. As the name implies, it covers damages that you’re liable for when you cause an accident. Most states require liability insurance, including Missouri. It’s designed to pay for the not-at-fault driver’s expenses, including:

  • Bodily injury: Liability insurance covers the medical bills for those injured in the accident who aren’t at fault.
  • Property damage: Liability insurance covers the cost to repair or replace damage to the driver’s vehicle who wasn’t at fault. 

Uninsured Driver Coverage

As of 2012, approximately one in eight (12.5%) insurance claims in the United States involved an uninsured driver, which is one reason why Missouri requires uninsured motorist coverage. Uninsured motorist coverage pays for damages caused by someone who doesn’t have the necessary insurance. Uninsured driver coverage helps pay medical expenses, lost wages, and any other damage from a personal injury caused by an uninsured motorist.  It does not cover any type of property damage to your vehicle; collision coverage covers property damage.  

Optional Insurance

Collision and Comprehensive Coverage

Collision coverage offers protection against damage to your vehicle after an accident. Accidents can include collisions with cars or other objects. This coverage is specific to collisions and doesn’t apply in other circumstances where damage may occur.

Comprehensive coverage fills in the gaps of property damage for collision coverage. It includes damages from theft, natural disaster, falling objects and more.

Medical Payment and Bodily Injury Coverage

While collision and comprehensive coverage offer protection to your vehicle, medical payment coverage relates to medical expenses you may encounter after getting into an accident, regardless of who was at fault.  

Underinsured Coverage

Underinsured motorist coverage works to protect you if the driver’s insurance doesn’t cover the full extent of the damage to your vehicle.

Underinsured motorist coverage is not required but may help protect you from those who have minimum coverage policies.

Understanding Your Car’s Value and Financial Risk: Auto Insurance Coverage Recommendations

There are two things you need to consider whenever you decide how much car insurance coverage you need:

  1. How much is my car worth?
  2. Are the savings on my bill worth the costs I may have to pay in the event of an accident?

How Much Is My Car Worth?

Your car’s book value is one of many factors used to calculate your monthly premiums. It may also determine how much coverage you want to purchase. Every vehicle has some inherent value, as it is your main mode of transportation. However, some cars are cheaper to repair or replace than others. 

If you have an older, high-mileage vehicle that’s completely paid off, you may not need the same amount of coverage as you would with a new car. You need to assess how much it would cost to repair or replace your vehicle versus the amount of coverage you receive. 

There are specific types of insurance that help you negate the potential problem of owing more than your car is worth if you’re in an accident, like gap coverage. 

How Much Am I Willing to Pay After an Accident

After assessing how much your vehicle is worth, you need to think through how much you can pay after an accident. 

  • Do you have an emergency savings account?
  • How much can you pay for a deductible?
  • Do you have health insurance that covers expenses for medical treatments after a car accident?
  • Would you be without income if you were injured in a car accident?

Trying to get your premiums down to the lowest possible cost may sound good in theory, but you need to contrast the savings to the coverage. Lower monthly payments may equal higher deductibles and out-of-pocket costs, even if you aren’t at fault for the accident.

As we said at the beginning, the best protection for car accidents is the coverage you have. Relying on someone else’s coverage if they are at fault may not net you the compensation you need after an accident.

Whereas Eng & Woods Attorneys are not in the business of selling automobile insurance, we do have a wealth of experience when it comes to automobile accidents. Too frequently our clients sustain significant injuries in an accident and then find that the other driver only has the state minimum insurance of $25,000 per person/$50,000 per accident. 

It’s important to us to help drivers understand that the best way to protect themselves is by carrying enough uninsured and underinsured coverage on their vehicles. This policy helps to cover injuries and other costs the at-fault driver may not have enough insurance to pay for.

Getting the Compensation You Deserve

If someone else’s negligent driving left you with large medical bills and unable to work, you may need to seek compensation for your damages. 

Contact a law firm you can trust. Eng & Woods Attorneys at Law will fight to get you the compensation you need to get you on the road to recovery.

Visit our Verdicts and Settlements page to see how we’ve made a difference for our clients.

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  • Columbia Office
    903 E. Ash Street
    Columbia, Missouri 65201
    Phone: 573-874-4190
    Fax: 573-874-4192
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