When drivers are thinking about the type of auto insurance coverage they need, there is no single solution that is going to be the best choice for everyone. Buying car insurance is a very personal thing, and a customer’s needs do change over time. The right policy for a newly-licensed driver may not be the right choice for someone who has been on the road for a number of years and who has a number of assets to protect.
A good place to start when considering how much auto insurance coverage to buy is to find out how much coverage is required by the state where the driver lives. To stay legal, this amount of protection must be put in place. In most jurisdictions, bodily injury and property damage coverage must be bought. Both of them cover the occupants of the other vehicle for injuries, economic loss and vehicle repairs.
In some states, drivers must also buy uninsured and underinsured motorist coverage. Uninsured motorist coverage pays for the policyholder’s injuries and damages caused by a driver who does not have coverage. It also pays for damages caused in a hit and run accident (where the at-fault driver’s identity cannot be established). Underinsured motorist coverage provides an extra level of coverage when the at-fault driver’s insurance policy limit is not high enough to pay for the injuries and damages he or she caused.