3 Types of Car Insurance Dave Ramsey Recommends Buying


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When it comes to car insurance, it can be difficult to determine what types of protections should be put in place. Indeed, most states require certain types of coverage, but there are many optional add-ons that might also be important for drivers.

Financial expert Dave Ramsey has given some advice on the best types of insurance to buy, and drivers who aren’t sure what they should have on their policy may want to take a close look at his recommendations.

Here are the types of car insurance recommended by Ramsey

Ramsey explained that there are three specific types of auto insurance that everyone should have.

“The most important are third party liability, comprehensive coverage and collision coverage,” said the Ramsey Solutions says the blog. “We’ll call them the Big Three. Think of them as the basics – coverage you can’t live without. If you have all three, that means you have full coverage.”

ramsey believes Liability coverage, in particular, is essential because most states require it. This type of coverage pays compensation to injured victims of an accident if the covered driver is at fault in an accident.

While most states have certain minimum requirements for liability coverage, Ramsey actually recommends buying more than that amount. “These state minimums are not enough to protect you. We recommend that you have aggregate coverage of at least $500,000 which includes both types of liability coverage – liability for property damage and liability for bodily injury.”

Full coverage is also important because it pays compensation in the event of theft, vandalism or natural disasters. And collision coverage pays for repairs or replacement of the vehicle if the covered driver is responsible for an accident.

Some other hedging recommendations

Along with the big three, Ramsey also suggests buying uninsured and underinsured motorist coverage, which pays for losses if an accident is caused by a driver without sufficient insurance. And medical payment coverage could also be important, as it pays out-of-pocket medical expenses when an accident causes an injury.

Bodily injury protection, which is required by some states and optional in others, is also on its list of coverages to buy, as is rental reimbursement, which pays for a rental car for drivers who have one. need during the repair of their vehicle. “If you think you need this backup plan, it’s not a bad idea to add it to your policy.”

On the other hand, there are certain types of Ramsey coverage doesn’t recommend, including mechanical breakdown coverage (which pays for some routine repairs), as well as GAP insurance (which pays the difference between what the insurer pays on the car and the amount still owed on the loan car).

“Our recommended car insurance coverage? Skip GAP insurance and save yourself a financial headache by buying a used car with cash in the first place. If you already have a car loan, secure aim to pay it off as quickly as possible so you can remove GAP coverage and lower your premium,” Ramsey said.

Is Ramsey right?

Ramsey is well versed in the types of auto insurance to purchase. It is always better to have more than the minimum coverage required by law, otherwise the costs of repairing or replacing a vehicle could be more than a driver can afford.

The Ascent’s picks for the best car insurance companies

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