How Much Car Insurance Do I Need?

Every driver has different needs when it comes to auto insurance, but two of the most common questions we hear are:

How much car insurance coverage do I need?

What kind of car insurance coverage do I need?

Several factors are used to determine the best auto policy coverage for you and your vehicle. A Mercury Insurance agent will get to know you and can help identify the right coverage and limits package for you, whether it’s a liability only policy or something more comprehensive.

Below are some of the key questions you should ask yourself when evaluating how much and what kind of car insurance you need:

Am I still paying off my car?

While you are making payments on a car, lien holders generally require you to carry collision insurance so the automobile is covered regardless of who causes an accident. If your car is paid off, you have the option to keep the same coverage or you can save some money and drop collision. Just remember, this means you may take on the risk of having to pay out of pocket for any damages to your vehicle not covered if you’re involved in an accident.

How much should my deductible be?

The deductible you choose is the amount you agree to pay when you use your collision coverage, regardless of who is at fault in an accident. A higher deductible lowers your monthly insurance rate; however, it increases the amount you will pay out-of-pocket in the event of a loss. Your deductible will be waived or reimbursed if the accident was caused by another party and they have accepted liability for the loss.

What impact does my location have?

Your location can be a factor in determining the coverage you choose. Living in urban areas with high auto theft and vandalism makes having comprehensive coverage more important than if you reside in less populated rural locations. In places with harsh winters, packed interstates and narrow streets, collision coverage is critical due to the increased likelihood of being in an accident.

Does the type of car I drive impact my insurance?

An old pick-up truck with lots of miles doesn’t always need the same coverage as a brand-new convertible. Depending on the value of your vehicle and whether or not you’re still making payments for it, purchasing comprehensive and collision may not be justifiable. In these situations, it may make sense to save the money, but ask yourself whether the savings are enough to offset the risk of potentially having a large repair or replacement bill.

What can I afford?

Cost may be foremost in your mind, but when it comes to insurance, peace of mind can be equally important. Look for a plan that protects you while trying to keep within your budget. Mercury offers a variety of insurance discounts, ranging from good student to multi-car, which makes protecting your vehicle more affordable.

How much do I have to protect?

If you own a home, a business or have other assets to protect, consider increasing your liability limits or buying an umbrella policy since you have more to lose in a serious accident. Conversely, if you rent an apartment and own an older car, you may not need as much coverage.

Whatever your situation, speak with an insurance agent to get all the information you need to make an educated decision. Insurance can be confusing, but a highly trained, professional agent is your best resource for finding the right coverage at the best price. Mercury sells insurance through independent agents so you can be sure you’ll get excellent advice and a coverage package specifically tailored to meet your needs.