Blog How Much Car Insurance Do I Need?

How Much Car Insurance Do I Need?

Written by Jared Thames—Sales Representative

November 11, 2018 · Personal Lines, Car Insurance

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We get this question a lot! To start, you will need to know the minimum limit of liability required to be carried by the state of which your vehicle is registered. In Mississippi, the minimum limit of liability is $25,000 bodily injury limit per person and $50,000 total limit in bodily injury regardless the number of people injured. The minimum limit also includes a separate cap for property damage in the amount of $25,000. No deductible applies! If your vehicle is not registered in Mississippi, consult an agent in the correct state to know the minimum requirements.

At Hennessey, Thames and Leavitt Insurance Agency in Vicksburg, Mississippi, we help guide and design car insurance plans to fit your budget while keeping you protected. We know what’s required by Mississippi but is that enough auto liability coverage? It could be, but in reality--, $25,000 is not enough for one person or for property damage. Think about all the vehicles you pass on the road every day. How many of those vehicles do you think are worth more than $25,000? The answer is a lot! What happens if you total someone else’s $30,000 vehicle? The policy will only pay up to $25,000 for that—what about the other $5,000? This is just one scenario to think on when deciding how much car insurance you need.

Car insurance liability is usually the least expensive part of a car insurance policy! I would recommend buying at least 4 times the minimum limit. However, this still may not be enough so the advice is to purchase as much auto liability as your budget allows. Now that we know about auto liability, let’s discuss additional coverages available on a car insurance policy. The additional coverages are commonly referred to as full coverage or physical damage coverage. To be more technical, these coverages are actually named comprehensive and collision. Insurance companies divide physical damage losses into those two categories. Comprehensive gives coverage for wind, hail, lightening, smoke, fire, theft, vandalism, flood, falling objects, glass breakage, and contact with an animal. Collision gives coverage for colliding with another vehicle or fixed object like a pole or fence. Because these losses are grouped into two categories, comprehensive and collision coverage has their own deductibles. Comprehensive is a broader coverage and like most Mississippians, you will probably hit a deer before you have an accident. It is common to have a lower deductible on comprehensive coverage because it is a broader coverage. The collision coverage is usually the most expensive part of the policy especially if you have accidents. When choosing a deductible, it is important to not choose one that is too high to afford. In a car insurance loss the company pays you the value of the loss minus the deductible. A common misconception is one must pay the deductible first before the car insurance company will pay out—this isn’t true the company just subtracts the deductible off the top of your loss. Essentially a deductible is how much you are self-insuring your own vehicle.

There are other additional coverages available when purchasing comprehensive and collision car insurance. There is often roadside assistance coverage available. This coverage sends help if your vehicle won’t start or if you have a flat. They also send help if you run out of gas or need a tow. You can also purchase rental car reimbursement. This coverage pays for you to have a rental car while yours is being repaired.

Call Hennessey, Thames & Leavitt Insurance Agency today to work with true car insurance professionals. We can help customize a car insurance plan to fit your budget while also keeping you and your vehicle protected.