Calculating exactly how much auto insurance you should buy can sometimes seem to be a quiz fit for a mathematician. Every state has some guidelines and ‘must-haves’ in their requirement for auto insurance. One can use this as a sort of starting point, but there is a lot more that needs to be seen and evaluated.

Broadly speaking, there are 6 basic parts of an auto insurance policy. These are: Bodily Injury Liability, Property Damage Liability, Personal Injury Protection, Collision Coverage, Comprehensive Coverage and Uninsured Motorist Coverage. In most states, it is important to include the first two parts in the policy while the others may or may not be mandatory.

Bodily Injury Liability - Insurance companies generally recommend a minimum of $100,000 per person and $300,000 per accident for bodily injury liability coverage. Being underinsured for this coverage may be harmful for the insured as he can lose his assets in a lawsuit resulting from an auto accident in which he is found to be at fault.

Property Damage Liability – The recommended coverage is a minimum of $50,000. Like in the previous case, the insurer stands to lose his assets if not adequately insured.

Personal Injury Protection (PIP) – PIP coverage ensures that the insurance company pays for the medical expenses and/or any lost wages and other costs that may arise when the insured is injured in an accident. Minimum PIP coverage of $10,000 is usually recommended. The insurer generally pays around 80 percent of the losses and also pays a death benefit. It may also cover the medical expenditure of the passengers of the insured as well. The expanded version of this coverage is called ‘no-fault’ coverage wherein the insured gets the insurance amount irrespective of whose fault it was. In some states this too may be mandatory in order to provide for child care and lost wages.

Collision Coverage – Collision coverage pays for the repairs of the car after accident and is normally the most expensive component of the auto insurance. One can lower this amount by having a higher deductible. This means that the insured is taking the risk of accident free driving upon him. If he is involved in an accident, he will have to pay up a higher amount before the insurance company chips in. It might be a good idea to get the vehicle’s value assessed before deciding upon how much cover one would like to take.

Comprehensive Coverage - Comprehensive coverage pays for damage to the car of the insured resulting from fire, theft, vandalism, windstorm, glass breakage, and the like. Like in the above case, assess the vehicle's value to make sure it's worth the amount that this coverage costs. This coverage too comes with a deductible and the insurer will not pay more than what the car was worth when it got wrecked.

Uninsured Motorist Coverage – This coverage pays for the injuries of the insured even if he is hit-and-run by a driver or someone who doesn't have auto insurance. As the number of uninsured and underinsured drivers is high, it is recommended that a minimum amount of $100,000 per person and $300,000 per accident be allocated under this coverage. This coverage is not important if the ‘no-fault’ coverage is in action.

Take the above points into consideration and then gauge your actual insurance requirement. If required, take quotes from several insurers before deciding upon the insurance value that you need.