One of the most common questions we hear is:
"How much should my auto insurance cost?"
My honest answer is:
It depends.
In fact, asking what auto insurance should cost is a little like asking what a pair of shoes should cost.
Are we talking about flip-flops? Work boots? Running shoes? A pair designed to last six months or six years?
The answer depends entirely on what you're trying to accomplish.
Auto insurance works the same way.
Before discussing price, we first need to understand the risk we're trying to protect.
Price Is Easy. Value Is Hard.
Most people shop for auto insurance by comparing premiums.
Unfortunately, many people never compare coverage.
That's like buying the cheapest parachute available and hoping everything works out.
The reality is that two auto insurance policies can have dramatically different prices because they provide dramatically different protection.
One policy might include:
- Liability limits of $25,000 per person
- No rental reimbursement
- No roadside assistance
- No uninsured motorist coverage
- A $1,000 deductible
Another policy might include:
- Liability limits of $250,000/$500,000
- Rental reimbursement
- Roadside assistance
- Uninsured motorist protection
- Glass coverage
- A lower deductible
Those are not the same products.
They're not even close.
Yet many consumers compare only the monthly premium.
The Most Expensive Insurance Is Often the Cheapest Insurance
Several years ago, I spoke with a driver who wanted to reduce his premium by lowering his liability limits.
The savings were approximately $18 per month.
Less than the cost of a couple fast-food meals.
A few months later, he was involved in a serious accident.
The injuries exceeded his liability limits.
Suddenly, the $18 per month he had saved didn't seem like much of a victory.
What looked inexpensive on the front end became very expensive on the back end.
The cheapest policy often becomes the most expensive policy when a claim occurs.
Insurance Is Designed for the Unexpected
Many people purchase insurance hoping they'll never use it.
That's understandable.
Nobody wants to have an accident. Nobody wants to file a claim. Nobody wants to see their vehicle damaged.
But insurance isn't purchased because we expect bad things to happen.
It's purchased because bad things can happen.
Most drivers will never cause a catastrophic accident.
Until the day they do.
Most drivers won't have a major uninsured motorist claim.
Until the day someone with no insurance runs a red light.
Insurance is one of the few products we buy hoping we never need it.
Yet when we do need it, we need it to work exactly as promised.
Understanding Liability Coverage
When discussing auto insurance, liability coverage is often the most important protection on the policy.
Many drivers focus on protecting their vehicle.
Few spend enough time protecting their assets and future income.
Liability coverage helps protect you when you're responsible for injuries or property damage to others.
If you cause a serious accident, medical bills, lost wages, legal expenses, and settlements can become substantial very quickly.
The question isn't:
"What are the minimum limits required by law?"
The better question is:
"What assets and future earnings am I trying to protect?"
The Coverage Most People Don't Think About
One of the most overlooked coverages is uninsured and underinsured motorist protection.
Many people assume everyone else on the road carries adequate insurance.
Unfortunately, that's not always true.
Every day, drivers are injured by motorists who:
- Have no insurance
- Carry minimum limits
- Allow policies to lapse
- Cannot afford the damages they cause
Uninsured motorist coverage protects you and your family when someone else's insurance isn't enough.
Ironically, it may be one of the most valuable coverages on your policy.
Should You Carry Glass Coverage?
The answer depends on your situation.
Some drivers rarely replace windshields and choose to self-insure that risk.
Others live in areas where rock chips and cracked windshields are common.
There isn't necessarily a right or wrong answer.
The important thing is understanding the tradeoff.
If you decline glass coverage to save premium, that's a conscious financial decision.
But once damage occurs, coverage generally cannot be added retroactively to cover a loss that has already happened.
Insurance protects future losses—not losses that have already occurred.
Insurance Is a Risk Management Tool
Many people view insurance as a bill.
I view it differently.
Insurance is a risk management tool.
It's designed to transfer potentially devastating financial losses away from your family.
When viewed through that lens, the conversation changes.
Instead of asking:
"How can I get the cheapest insurance possible?"
We begin asking:
"How can I protect my family from the largest financial risks we face?"
That's a much different conversation.
What Value Will This Policy Provide Over the Next Decade?
The better question isn't:
"How much does auto insurance cost?"
The better question is:
"What value will this policy provide over the next ten years?"
Will it protect your assets? Will it protect your family? Will it provide peace of mind? Will it respond when you need it most?
The goal isn't simply to buy insurance.
The goal is to buy protection.
Final Thoughts
The question isn't:
"What's the cheapest auto insurance available?"
The better question is:
"What's the best protection for my situation?"
Price matters.
Value matters more.
The best insurance policy is often the one that protects your family, safeguards your future, and gives you confidence every time you get behind the wheel.
Auto insurance isn't just a legal requirement.
It's financial protection. It's security. It's peace of mind.