Insurance Needs Approach - Personal Auto Insurance Policies

Anyone who operates a non-commercial vehicle in the United States must have personal automotive insurance on that vehicle in the event of an accident, and it's also the law. Higher coverage amounts and lower deductibles will command higher premium payments from the insurance company. Those seeking a personal auto policy should discuss the various coverage amounts with their agent to determine the appropriate levels of coverage based on their needs.

For example: Families with new teenage drivers on the road may want to consider increasing their coverage, since statistics show that more accidents happen among newer drivers. Whereas, a middle-aged couple labeled as "safe-drivers" with no prior accidents may desire to lower coverage amounts or raise their deductible to help keep premiums down.

Listed below are some common coverage amounts found in a personal auto policy:


Coverages (for example)

Limit of Liability
Liability $100,000 per person
$300,000 per occurrence
$50,000 property damage
Medical payments $5,000 per person
$15,000 per occurrence
Uninsured motorist $100,000 per person
$300,000 per occurrence
Damage to your auto
1. Collision
2. Other than collision

$500 deductible
$500 deductible
Liability Insurance


Related Articles
  1. Insurance

    How Much Car Insurance Do I Need?

    Find out to determine how much car insurance you actually need with this overview of the different types of coverage available in your policy.
  2. Insurance

    Millennials Guide: Picking the Right Car Insurance

    Millennials fall into the category of high car-insurance rates. Check out some of the ways to save money, like owning an older car or leasing a vehicle.
  3. Insurance

    How Much Homeowners Insurance Should You Carry?

    This breakdown of coverage into its component parts will provide the answer.
  4. Insurance

    When To Drop Collision -- And Risk It All

    Thinking about dropping the collision coverage on your trusty but aging jalopy? You're most likely to do so after the car's eighth birthday.
  5. Insurance

    Group Term Life Insurance: What You Need to Know

    Is group term life insurance really a good deal? What you need to know about employer-sponsored group term life insurance coverage.
  6. Home & Auto

    Filling The Gaps In General Liability Insurance

    Standard liability coverage may not be enough. Special needs call for specialized policies.
  7. Savings

    4 Reasons Why Waiting To Buy Life Insurance Is a Bad Idea

    Understand the benefits of applying for and securing life insurance coverage while you are young and healthy, and learn the cost of waiting to get coverage.
  8. Insurance

    6 Best Renters Insurance Providers

    Here are six companies that consistently offer excellent renters insurance at competitive rates.
  9. Your Clients

    Now Is the Time to Check In on Clients' Insurance

    Insurance forms the foundation of many financial plans, and you need to make sure that your clients’ coverage is kept up-to-date.
  10. Insurance

    7 Mistakes to Avoid When Buying Health Insurance

    Understand the need for health insurance and why some undervalue the need for coverage. Learn about the top seven mistakes to avoid when purchasing insurance.
RELATED TERMS
  1. Auto Insurance

    A policy purchased by vehicle owners to mitigate costs associated ...
  2. Insurance Coverage

    The amount of risk or liability covered for an individual or ...
  3. First Dollar Coverage

    An insurance policy feature that provides full coverage for the ...
  4. Uninsured Motorist Coverage - UM

    An addition to a standard automobile insurance policy that provides ...
  5. Coordination Of Coverage

    A review or modification of an individual's or business’ insurance ...
  6. Prior Acts Coverage

    A feature of an insurance policy that extends the coverage of ...
RELATED FAQS
  1. When does it make sense to buy personal liability insurance?

    Protecting yourself from lawsuits is important to the financial well-being of you and your family. Is personal liability ... Read Answer >>
  2. What are some examples of industries that practice price discrimination?

    Understand the various types of insurance coverage offered in the insurance marketplace, and learn why each policy should ... Read Answer >>
  3. How does the 80% rule for home insurance work, and how do capital improvements affect ...

    The 80% rule refers to the fact that most insurance companies will not fully cover the cost of damage to a house due to the ... Read Answer >>
  4. Does renters insurance cover car theft?

    Learn how the theft of a vehicle is not covered under a renters insurance policy but any personal property stolen from a ... Read Answer >>
  5. What caused the European / Eurozone debt crisis?

    Understand how insurance companies price insurance premiums, and learn the importance of data and statistics in the insurance ... Read Answer >>
  6. Does renters insurance cover dog bites?

    Learn how a renters insurance policy can provide liability coverage for dog bites and how coverage may vary by state and ... Read Answer >>
Hot Definitions
  1. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  2. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  3. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  4. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  5. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  6. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
Trading Center