There are many instances where there is a government requirement to purchase some amount of car insurance. Minimum insurance requirements can vary based on where you live and what insurance you are considering.
For example, most states in the USA require some level of car insurance, but New Hampshire does not require auto insurance for all citizens. In New South Wales, Australia drivers are required to purchase a Green Slip, or compulsory third party (CTP) insurance.
However, the minimum required insurance may not cover enough to protect your financial interests. A green slip only covers compensation for people killed or injured in an accident; it does not cover damage to any vehicle in an accident.
If your vehicle insurance does not cover damages to your vehicle or other people’s vehicles, then every time you get into your car you are potentially risking tens of thousands of dollars.
Imagine if you find yourself in an accident with someone driving a BMW M6. That car costs over $100,000 and y0u could be liable for buying the owner a new one if you are at fault in the accident.
A $100,000 debt can wipe out years or even decades of savings, and it’s simply not worth it to take a chance on ruining years of savings just to save a few bucks on your monthly insurance premiums.
How Much Insurance is Enough?
The most important thing to make sure car insurance costs is medical costs for all injured parties. There are very few cars that cost more than $75,000, but medical costs can be well into the hundreds of thousands or even millions depending on how many people are hurt and what injuries they have.
There is no rule that can tell you how much insurance you should buy, but it is important to consider that the more money you have, you more you have to lose. In America, if you have little to nothing saved, you have the option to declare bankruptcy if a debt is too big for you to pay, but that will wipe out your savings. The more you have saved, the more insurance you need to protect those assets.
It is important consider how much insurance is right for you, and then get multiple quotes to make sure you find the best deal on the insurance you need. There are many websites that compare car insurance quotes in America and Green Slips in Australia.