Consumers need to consider their state’s insurance laws, their budget, and their protection needs when deciding which types of coverage to purchase and how much they should buy. All consumers are unique and should evaluate their own needs to determine how much car insurance coverage is appropriate for them.

To determine how much coverage you need, take the following scenarios into consideration:

Personal injuries: States with “no-fault” laws will require drivers to purchase personal injury protection (PIP) coverage. Be aware that some states require drivers to purchase only a couple thousand dollars worth of PIP, which may not be sufficient to cover all of your medical bills and loss of income after an accident. You may want to consider getting PIP limits that are higher than the state minimums.

If you live in a state that doesn’t require PIP, consider whether you want to purchase med-pay coverage to insure against personal injuries suffered by you or others covered under the policy. If you already have a medical policy, talk to our agents to avoid paying for unnecessary, duplicate coverage.

Damage from uninsured or underinsured drivers: Unfortunately, there are many drivers who carry minimal or no coverage. If uninsured motorist coverage isn’t required in your state, consider purchasing it to protect yourself in an accident caused by someone who has inadequate insurance. According to the Insurance Research Council¹, an estimated 13.8 percent of drivers lacked car insurance in 2009.

If you don’t have uninsured motorist coverage, med-pay, or PIP coverage, you could be left having to rely on health insurance for protection in these situations. Either way, it’s good to include it in a quote just to see how much it would cost. If you do opt to get the coverage, see what the price is at different coverage levels. You may be able to get a lot more protection for only a little extra premium.

Liability to third parties: Almost every state requires drivers to carry a minimum amount of liability coverage. However, these minimums are sometimes low; too low to provide adequate compensation for medical care and property repairs after a serious accident. If you or someone covered by your policy causes more damages than your liability policy can cover, you may be held responsible for unpaid damages and have to come up with the money yourself.

How much liability coverage you purchase should be determined by your budget and the amount of exposure you’re comfortable with. Consider how much a serious accident could potentially cost in medical and repair bills. According to the Insurance Information Institute² (III), most industry and consumer groups recommend 100/300 liability coverage, which would cover up to $100,000 for one person’s injuries per accident and up to $300,000 worth of injury-related costs total for the accident.

Damage or theft to your vehicles: Motorists who finance or lease a vehicle will likely be required to purchase comprehensive and collision coverage as a condition of the loan or lease. But even if you own your vehicle, you should consider the benefits of purchasing these coverages, which will provide compensation up to the actual cash value of your vehicle if it is damaged or stolen. Vehicles with a high market value are generally more expensive to repair, and it may be beneficial to cover the car rather than risk having to pay for costly repairs out of pocket.

Note, though, that while deciding whether to purchase the optional coverages is ultimately up to the individual consumer, the III says that if your car is worth less than 10 times the comprehensive and/or collision premium, “purchasing the coverage may not be cost effective.”

If you do opt to purchase comp and collision, understand your deductibles. A deductible is the amount of money you’ll have to pay after making a claim before your coverage will actually kick in. So if you have $1,500 worth of damage and a $500 deductible, only $1,000 may actually be covered by your insurer. The deductible you choose will affect how much you have to pay after filing a claim and how much you end up paying for comp and collision. According to the III³, increasing your deductible from $200 to $500 could lead to a 15 to 30 percent drop in your comp and collision premiums.

Incurred expenses: Temporarily losing access to your vehicle can also lead to additional expenses. One example is the expense of rental vehicles as temporary transportation and towing services to get your car to a repair shop. For instances like these, consider towing and rental coverage, which are usually available for a relatively small additional cost.