When determining the right amount of car insurance coverage, it’s essential to find a balance between affordability and financial protection. Factors to consider include state requirements, net worth, and cash on hand. Both bodily injury liability and property damage liability coverage should exceed your net worth to bridge any gaps in coverage. Knowing your net worth is crucial in defining appropriate liability coverage levels. Minimum liability insurance requirements vary by state, with some also mandating uninsured motorist coverage and personal injury protection. Your lender may have additional requirements for financed vehicles, such as comprehensive and collision coverage. If you don’t meet these requirements, your lender can charge you for insurance or repossess the vehicle. It’s recommended to carry more coverage than state minimums if possible, as car accidents can be costly. Various types of coverage, such as collision, comprehensive, personal injury protection, MedPay, and uninsured motorist insurance, offer different protections for different circumstances. Some less common coverage options include gap coverage, rental reimbursement, and roadside assistance. It’s crucial to have the right coverage limits based on your situation, driving history, vehicle make and model, and deductible. Full coverage auto insurance may not be worth it for older vehicles with low value. New Hampshire is the only state that doesn’t require car insurance, but you must prove financial responsibility in case of an accident. Having enough liability coverage is crucial to protect your net worth in case of an accident with expensive damages and injuries.

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