Even the very best of drivers should have some amount of insurance coverage attached to themselves and the vehicles they own. That’s because the worst cases can sometimes happen to even the safest and most reliable drivers—whether those circumstances are caused by their actions or those of another driver. And that’s also why nearly every US state has a minimum amount of car insurance their residents must purchase in order to drive on their roads.
Even so, there are a lot of options to choose from when it comes to shopping for car insurance, and there are a lot of personal factors that will likely affect what kind of coverage you choose. The biggest question drivers ask themselves is often “Well, how much do I really need?”. But finding the right answer to that involves asking some additionally important questions.
Q: Why are car insurance minimums required?
A: It comes down to the laws of responsibility. Licensed drivers have a legal responsibility to drive safely on the roads, but that responsibility can’t prevent every single accident from happening. So the additional responsibility that licensed drivers and car owners have is to compensate the other driver for any injuries or losses they suffered if it’s found that the responsibility to drive safely was breached. And that legal responsibility is fulfilled through car insurance.
Q: What kind of car insurance am I required to have?
A: Most states require drivers to have at least a minimum amount of general coverage set forth by their state’s laws, and those minimums most often require having it through liability insurance. This type of insurance generally covers bodily injury and property damage caused to another person during the crash, and its most common limits are $25,000 per person, and $50,000 per accident for bodily injury and $25,000 for physical damage. But again, those numbers may vary depending on the state you live in.
Q: What other types of car insurance are there?
A: Aside from liability insurance, you can also purchase uninsured motorist coverage or underinsured coverage. Uninsured motorist coverage is optional in many states, and it helps to protect you when the driver you’re in an accident with has no car insurance, meaning they can’t pay for your resulting medical bills, property damage, and more. According to the Insurance Information Institute, approximately 1 in 8 drivers don’t carry any car insurance, so uninsured motorist coverage is often a smart add-on to your plan.
Underinsured coverage can help cover your damages when you’re involved in an accident with a driver who is only carrying the very minimum, state-mandated amount of car insurance, which means their plan may not provide them enough insurance to cover the cost of all injuries and property damages. In that case, your underinsured coverage would be enacted in order to help cover some of those costs.
Some states may also require drivers to purchase additional coverage such as personal injury protection or medical payments coverage. And within every type of plan, there are also different tiers of coverage to choose from. The more coverage a plan has, the more it will cost.
Q: What are the minimum coverage requirements in Missouri?
A: No matter where you live, liability car insurance is the main required coverage. How much that liability needs to cover you for is what varies by state. In Missouri, the minimum amount of liability coverage required is $25,000 per person and $50,000 per accident for bodily injury liability, and $25,000 per accident for property damage. But Missouri also requires drivers to obtain uninsured motorist bodily injury coverage, which is also $25,000 per person and $50,000 per accident.
Q: But if Missouri is a no-fault state, why do I need uninsured motorist coverage?
A: As a no fault-state, if you’re involved in an accident in Missouri, state laws say that each party’s own insurance company will cover the cost of the damages they suffered, rather than the victim relying on the at-fault driver’s insurance company to pay out their damages. And this is exactly why uninsured motorist coverage is required—because it may help pay for those drivers who neglect to secure any car insurance for themselves, and thus would have no insurance provider to turn to after an accident. It can also help in the case of a hit-and-run. It may not exactly feel like the most fair situation—having to pay for someone else’s car insurance—but it’s what Missouri has deemed the safest option for everyone.
Q: Is the minimum coverage requirement enough for me?
A: From a legal standpoint, yes—if you have the minimum coverage requirement for your state, then you technically have the coverage that is legally required of you, and you are not legally required to obtain more than that. But determining if the amount of coverage provided through that plan is financially adequate for you comes down to a number of other important factors. Most of the time, however, experts advise that only having the minimum coverage required isn’t the best decision for many people to make.
Q: Why should I purchase more car insurance than what’s required?
A: The simple answer is because you want to make sure you have all the coverage you need should the very worst happen. As mentioned, no one can predict when an accident might happen or how severe it will be. So the more coverage you have, the better you ensure that you, your family, and your property are thoroughly protected. And remember, not all types of car insurance cover all types of damage. Liability insurance often only covers injuries and property damage, but what if you suffer damages in other ways? For example, what if you have to miss work as a result of your injuries? Liability insurance won’t compensate you for any lost wages, but there are other types of coverage and plans that can. It all depends on what you want to protect, and how well you want to protect it.
Q: How do I determine the best car insurance plan for me?
A: When it comes to liability coverage, having the minimum is good, but most insurance experts will recommend bumping your coverage up to include $100,000 per person, $300,000 per accident, and $100,000 for property damage. This extends the coverage amount quite drastically should a truly severe incident occur, but doesn’t often cost that much more on your monthly premium.
What type and how much coverage you have also depends heavily on your life circumstances. For example, if you have a spouse, you want to make sure you’re both covered under your plan. Same for any younger, new drivers in your house—make sure you add new teen drivers to your coverage, and because they’re new, you may want to increase coverage as a precaution. Where you live also plays a role in the type of coverage you have—if you’re in a big, busy city with a high population, the chance of being involved in an accident is greater than if you live in a small town in the middle of nowhere. Or if you live in an area that has severe weather often, more coverage is wise. It all comes down to asking yourself how your life affects your driving and securing coverage to match it.
Q: What kind of insurance coverage do I likely not need?
A: Again, it’s all circumstantial, but we can at least discuss some types of coverage you may not need. For example, if you drive an older model car, it’s not wise to have premiums that exceed 10% of your car’s total value, otherwise you could pay more over time than you would recoup for repair or replacement of that vehicle. If you have more than one car, you also likely don’t need to add rental reimbursement to your policy, which will cover the cost of a rental car while your damaged car is in the shop. And if you already have very comprehensive health insurance, then you may not need to add additional personal injury protection coverage to your car insurance policy. But again, review your circumstances and finances carefully to best understand exactly how much coverage you need.