How Much Coverage Do You Really Need?

Being under insured can be very dangerous ,but, having too much insurance can be a costly error as well. Without insurance, your property is at risk, if an accident happens and your not covered you might lose everything. The minimum amount of insurance required by your state is often not enough to cover the major expenses involved in replacing a vehicle. This is especially true if you own an exotic or luxury vehicle.

State laws might require that a drive only have liability coverage as low as $15,000 per person, $30,000 per accident, and $5000 property damage. At least half of the 50 states require coverage minimums of at least $25,000 per person and $50,000 per accident. The other half require at least $10,000 in property damage coverage. If you can afford it always buy more than the minimum coverage. If you hit a $30,000 BMW, $10,000 dollars of coverage is only going to get you sued.

The more valuable assets and property you have, the more insurance you are going to need. Most insurance companies recommend minimum liability coverage of at least $100,000 per person, $300,000 per accident, and $50,000 in property damage. This is especially important if you have assets to protect, such as a house or expensive car. Most insurance companies recommend a $1 million "personal liability umbrella" policy issued in conjunction with a homeowner's policy. Allstate reported that this type of coverage cost an average of $270 a year, but the amount varies depending on your location and other geological factors. An "umbrella" policy will protect your family from a financial disaster in the event of a major lawsuit.

Just like buying a car, there is no one ultimate solution when it comes to buying insurance. Rates vary widely from company to company. Surveys suggest that you should pay anywhere from $400 to $2700 annually for the same coverage but from different companies. Shop for insurance by consulting two or three of the largest insurers, such as State Farm and Allstate. Then, contact one or two independent agents who can quote premiums from more than one company. In addition, there are direct-marketing companies, such as GEICO and Progressive, which do business over the phone rather than through agents. They also offer some of the lowest rates. Always ask for an itemized list of coverages you plan to purchase. Make sure there are no hidden costs or exclusions.

"We have the best rates available," said spokeswoman Kerry Perry of Allstate, whose rates dropped somewhat during 2011. But with so many factors involved in setting rates, it's still alway best to get several quotes before making a decision.

In 2010, the average price of auto insurance in the United States was $1001, according to the Insurance Information Institute. They expect the cost of auto insurance rates to rise by 3.5 percent in 2011, which would be a small increase in comparison to the last six years.

Don't forget the Internet. Many companies now offer online quotes, and insurance shopping on the Web allows you to compare rates from multiple providers in the comfort of your own home. In fact there are several offers available on this blog. Take advantage of those