Auto insurance coverage is a necessary part of owning and driving a vehicle. As long as you plan to be on the road, you need to plan and budget for insurance coverage. Your premium payment needs to be factored into your family financial plan like other monthly bills. The average driver in the United States pays around $130 a month for insurance coverage. However, you could pay significantly more or less based on several factors. Regardless of how expensive individual coverage may be, insurance is required in most areas.
The majority of states require that drivers carry minimum liability coverage to be on the road. These laws are in place to protect other drivers. If you are at fault in an accident, your liability insurance coverage will pay for bodily injury and property damage claims made by other drivers. Liability insurance doesn’t protect you or your vehicle.
As a result of the limited scope of liability coverage, many drivers choose to purchase more than the minimum requirements. Collision and comprehensive coverage will provide personal protection no matter who is at fault in an accident. Full coverage insurance will also protect against non-accident-related incidents such as theft, vandalism, or acts of nature. However, with many policies and coverage options available, many people wonder how much insurance they should purchase.
Financial advisors and others have various recommendations regarding the amount of insurance you should buy. The Dave Ramsey car insurance recommendation is to get enough insurance to protect you from financial loss. Let’s look at some suggestions that Dave Ramsey makes for insurance and coverage amounts.
Who is Dave Ramsey?
Dave Ramsey is a financial guru who provides advice and strategies to help Americans improve their finances and monetary standing. He is best known for his acclaimed debt management strategies that have helped many people climb out of debt and build secure financial futures. Aside from debt advice, Mr. Ramsey also offers tips for everything from car insurance to college loans. When discussing auto insurance, Dave Ramsey, along with other experts, agree that consumers need to make sure they are protected from significant financial burden in the event of an incident.
What does Dave Ramsey say about auto insurance coverage?
As discussed, financial expert Dave Ramsey urges consumers to get enough insurance to protect them from a loss that would be otherwise devastating. Paying a few hundred dollars for new lights or minor dents can be an inconvenience. Having to sell off your property or get a home equity loan to pay off the medical bills and property damage for someone in an accident you caused could be devastating.
At the very least, Mr. Ramsey recommends that all drivers get enough insurance to meet the minimum requirements in their state. He also says that minimum coverage is only suitable for drivers without many assets or drivers on their policy. He suggests that drivers carry $500,000 worth of total coverage, including property damage and bodily injury liability coverage. Additionally, Mr. Ramsey also recommends that drivers carry full coverage auto insurance unless they can replace their car with cash. If your savings account doesn’t cover the costs to replace or repair your car, you should invest in comprehensive and collision coverage.
How can you get cheaper insurance coverage?
If you follow Dave Ramsey’s suggestion for auto insurance coverage, you may discover that your premium rates are expensive. Your premiums could be well above the national average based on your driving record, location, age, and other factors. If you want to get lower insurance rates, the best thing you can do is maintain a clean driving record. Aside from this, however, you can also use an online comparison tool to shop around for rates and plans that are more affordable and meet your needs.
Insurance is necessary for most drivers. Financial experts like Dave Ramsey suggest getting enough insurance to protect drivers from undue financial burden and loss. With some time, research, and financial considerations, you can find the right insurance coverage for your situation.