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How Much Car Insurance Do I Need?

Blog - How Much Car Insurance Do I Need When buying Oklahoma car insurance sometimes the hardest question is how much do you really need? This can be hard to figure out, especially when Oklahoma personal auto insurance companies use confusing language that can require more than a few google searches to find out the answer.

How much insurance coverage you need varies on your financial situation, the value of your vehicle, your driving history, and the area that you live. In almost every state, there is a minimum amount of insurance that you have to buy in order to legally drive. So that leaves the questions, where do you start?

The Basics

Insurance terms are often thrown around like full coverage. When talking about buying limits and figuring how much auto insurance you need this usually only refers to LIABILITY coverage.

LIABILITY INSURANCE covers what you are liable for a 3rd party—meaning if you get into an accident in which you’re at fault, this would pay for things like repairing someone else’s car, their building, and medical bills for the other party involved as a result of your actions. This is not the coverage that will pay for damage to your personal vehicle- you’ll need comprehensive and collision for that.

How To Figure Out How Much Liability You Need

As mentioned, state laws usually set a minimum liability coverage amount. Typically, this amount is pretty low, but that would be all you need to legally drive state- that doesn’t mean it would protect you financially. If you cause an accident, insurance will pay up to your coverage limits. If the damage or medical bills go over your insurance limit, then you are responsible for the remaining balance. This doesn’t take into account if the other driver sues. You will be personally responsible if legal bills, judgments if your insurance limits have out. If you don’t have the money, then this typically includes having your personal assets seized. Because of this, we suggest having enough insurance to cover your assets.

Liability coverage is usually shown on the policy as three numbers separated by slashes. For example, your Oklahoma personal auto policy may look something like 100/300/100—this means you have up to $100,000 per person for their injuries, $300,000 total for ALL injured parties, and $100,000 for property damage like fixing someone’s car.

Oklahoma state minimum limits sit at 25/50/25. Meaning that there is only $25,000 per person for medical bills and only $25,000 for property damage. With most cars on the road costing extensively more and medical bills being so expensive, this could lead to complete financial ruin.

Since medical bills and property damage can be incredibly expensive, when looking at what limits to choose, at least as much coverage as your net worth. If your total assets are worth $100,000, then a $100,000/$300,000/$$100,000 may be a good fit, but this will only protect you to up to the limits.

Want an insurance hack when shopping for your Oklahoma auto policy? Look at higher limits. Many companies offer discounts for higher limits. This can sometimes end up being less expensive than lower limits are.

What Other Car Insurance Coverage Do I Need?

In addition to liability coverage, many states require other forms of car insurance.

MEDICAL EXPENSES/MEDPAY. MedPay works like PIP and can be used for a claim no matter who is at-fault for an accident, but it doesn’t cover lost wages and usually has lower policy limits than PIP. Again, you probably don’t need more than what’s required if you have healthcare.

UNINSURED/UNDERINSURED (UM/UIM). Uninsured/underinsured motorist coverage can help if you’re hit by an uninsured driver, experience a hit-and-run, or collide with someone who doesn’t have enough coverage to pay for all the damage they caused. Since it’s pretty affordable and can really come in handy, it’s worth adding to your policy even if it’s not required by law in your state.

Written by: Avery Moore