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How Driving Habits Affect How Much Auto Insurance To Buy

Just as your driving habits can affect your auto insurance premiums, they can also affect how much auto insurance you should buy.

When to Decrease Your Car Insurance

You might not need high levels of car insurance coverage if:

  • You drive in low risk areas. If you live in a slow-paced, rural area where you generally only pass a few other cars on your way to work or the grocery store, you probably don't need a high amount of auto insurance.
  • You drive infrequently. Maybe you're a retired senior and you like to take it easy, or maybe you work from home and only venture out once or twice a week. If you don't drive a lot, you might not need much coverage.
  • You're the only driver on your policy. If you're the only person you have to worry about, and you are confident in your driving skills, you might consider lowering your car insurance coverage.

When to Increase Your Car Insurance

While purchasing less car insurance coverages can help you save on your car insurance rates, there are some scenarios where you might want to actually consider purchasing more car insurance.

When it comes to purchasing car insurance, it's probably not best to buy less if:

  • You drive in high risk areas. This includes highly populated cities where there are plenty of other motorists on the roads.
  • You drive a lot. Whether it's for work or play, the more you drive, the more you risk being involved in an auto accident of some sort.
  • There is anyone else on your policy. Even if you are confident in the driving abilities of anyone else on your car, you can't control other drivers―including those on your policy.

Before Deciding How Much Auto Insurance to Buy

The above lists include solid reasons why you might increase or decrease your car insurance coverage based on your driving habits; however, note that many other factors go into determining how much coverage you should―or must―purchase.

Before you start shopping for car insurance, or asking your agent about how to lower your coverage, think about:

  • Your state requirements. Most states require you to have either a certain amount of liability coverage (which typically handles bodily and personal injury coverage) or some other proof of financial responsibility before you can register and drive your vehicle; however, make sure you are familiar with any additional coverage types your state requires. For example, does your state require personal injury protection (PIP) in addition to liability coverage?
  • Your vehicle. If your vehicle is fairly new, an antique, or otherwise super valuable, cutting back on auto insurance isn't the best idea.
  • Your lender. If you financed your vehicle, chances are your lender requires you to have a certain amount of comprehensive and collision coverage until you pay off your auto loan.
  • Your bank account. If you don't have enough in your savings account to replace or repair your vehicle in the event of an accident, vandalism, or theft, purchasing additional coverage (such as collision and comprehensive) is probably a better financial decision than saving money on monthly premiums by purchasing the bare minimum.

If any of these factors force you to buy more coverage, don't worry: You can still save money with auto insurance discounts―especially if you practice safe driving habits.