The government has its laws on the minimum auto insurance coverage each motorist should have. However, it is always a good idea to do your own analysis and determine the coverage limit that suits you best. Here are some of the major things to consider when doing this analysis:
The value of your car is one of the premiere factors that should determine your coverage limit. This applies to the collision and comprehensive type of coverage since they are the ones that repair or replace your car in case of loss or damage. For example, if your car is valued at $45,000, then your coverage should be at least that much so that you can get your car replaced in case it's stolen or written off.
For collision and comprehensive coverage, it is also important to factor in your emergency fund reserve when determining coverage limit. For example, if your car was to incur $1,500 damage today, would you have enough funds to pay for the damage? What if you lost the car today or if it was razed to the ground by a wildfire, would you have the money to replace it? You may not need more than state-mandated coverage if you can write a replacement-car check without batting an eyelid. However, you should increase your coverage if your emergency money account is running low.
Value of Assets
When it comes to liability coverage limits, you should not just rely on the state-mandated limits; it won't necessarily be the right one for you. You should know that if someone should sue you for accident damages, the court may compel you to use your personal funds and assets to settle the damages if you don't have adequate coverage. Therefore, if you have valuable assets, you should increase your liability coverage limits so that you don't risk losing them in case you are sued for an accident.
Lastly, you should also consider how much coverage you can afford; don't forget that your rates rise with an increase in coverage. All the analysis in the world won't help you much if you need $2,000 for the "right" coverage, but you can't come up with the money. Don't forget that having at least some coverage is way better than having no coverage at all. Therefore, choose a coverage limit you will be able to raise at the time of purchasing or renewing your policy.
See different coverage amounts and options at car insurance websites like http://www.wyattinsuranceca.com/.