This Is the ‘Trickiest Part’ of Getting Auto Insurance, According to Dave Ramsey

Drivers need to be prepared for this challenge when buying insurance.

Drivers need auto insurance to protect their hard-earned money and to ensure that they are in compliance with their state's minimum coverage laws.

It can be confusing to find and purchase the right policy, though. And finance expert Dave Ramsey has identified one specific part of buying coverage that is especially tricky. Here's what Ramey said is so complicated for most people.

This is the hardest part of getting covered

According to Dave Ramsey, the hardest part of buying auto insurance is figuring out what to purchase in the first place.

"Determining what kind of coverage you need is usually the trickiest part of the process," Ramsey said. "Most states have a minimum amount of coverage that's required for all drivers -- this keeps you and other drivers protected -- and then from there it's up to you based on what you can afford."

As Ramsey pointed out, this can be a challenge because there are lots of different kinds of optional insurance coverage. So once motorists have bought the minimum required coverage mandated by the state, it becomes necessary to figure out what they do and which of these add-on protections is actually worth paying for.

What kinds of insurance should drivers buy?

So, how can motorists simplify the process of getting the right auto insurance to make sure they have all the protections necessary to protect their assets, but to avoid paying more than needed for unnecessary protections?

The best thing to do is to understand the kinds of coverage on offer and what each specific policy provision will do. For example, some of the different kinds of auto insurance motorists could purchase include:

• Additional liability coverage: Most states mandate buying at least some protection, but it can pay to purchase more than the minimum amount because otherwise drivers could face out-of-pocket losses for damage they cause to others in a crash they are at fault for.
• Comprehensive and collision coverage: Comprehensive coverage and collision coverage are two different add-ons. Comprehensive insurance pays for non-crash-related losses while collision coverage pays for damages drivers cause to their own vehicle if they are at fault for an accident. "Comprehensive coverage is basically for anything that might happen to your car when you're not driving it: extreme weather, flood, fire, falling objects, vandalism and theft," Ramsey explained.
• Uninsured and underinsured motorist coverage: This pays for a policyholder's losses when a driver without enough insurance causes them damage. "Unfortunately, just because the law requires car insurance doesn't mean everyone on the road has it," Ramsey warned. "Uninsured and underinsured motorist coverage protects you if you're in an accident with someone who doesn't have insurance or doesn't have enough insurance to cover damages."
• Gap insurance: If insurance pays out after a total loss but the money received isn't enough to pay off the car loan, gap insurance pays the difference.
• Personal injury protection: This is sometimes required depending on the state you live in, and it pays for lost wages and medical bills in more minor crashes in no-fault states regardless of who caused the accident.

Ramsey recommends researching each of these options to see which insurance protections make sense to buy. In most cases, it is important to buy all of these forms of added protection, because otherwise substantial out-of-pocket losses could occur when something goes wrong.