Car insurance is a must in many U.S. cities, where you must purchase an auto policy if you want to drive on the roads. However, many people are confused because there are so many different types of policies and rates. What type of car insurance do you really need? Are you currently overpaying for your needs, or are you at risk because you are under insured? Find out by reading this article:
Types of Car Insurance
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Collision Coverage
Collision coverage is necessary if you want the auto insurance company to pay to fix your car. Should you get into an auto accident with another car, or hit a tree or a guardrail, you can be safe in knowing that your car will be repaired after you pay for your deductible.
If your car has more damage than it’s actually worth, the insurance company will deem it totaled, and will pay to replace it. For example, if you have an older car model that is valued at $3,000, but the car has $5,000 worth of damages—the insurance company will classify the car as totaled and give you a check for the current value of the car rather than pay more to fix it.
Liability Insurance
Liability coverage is the most basic type of insurance, mandated by most U.S. states. This is what protects other drivers on the road as well as covers property and medical bills in case of an accident that was your fault.
It’s important to understand that the party found at fault for the accident will be responsible to pay for all damages, even if they exceed the amount of your coverage. Therefore, it can be beneficial to purchase higher limits of liability insurance to make sure you are protected.
Comprehensive Coverage
For damages that are not related to auto accidents, such as a theft or natural disasters, comprehensive coverage will cover that loss. Although this type of insurance is costlier than the others, purchasing tracking and anti-theft devices can provide discounts on this policy. This way, if a tree hits your car or it’s stolen, you can rest assured that your vehicle is protected.
Uninsured /Underinsured Motorist Insurance
Uninsured and underinsured motorist insurance is helpful should you get into an accident with a party that does not have auto insurance altogether, or has a policy with extremely low minimum coverage. Although it is the other party’s responsibility to fix your car, if they do not have the coverage required for all of the repairs, you will be liable for the rest. Purchasing uninsured and underinsured motorist insurance is not mandatory in any state, but it is definitely worthy of consideration if you want to make sure your car is protected in all circumstances.
Personal Injury Protection
Personal injury protection insurance (PIP) provides coverage for medical bills associated with an injury for you and all of the parties involved. Although this coverage is not available in all states, you should ask your insurance provider if you are worried you may not be able to pay your and your passengers’ medical bills in case of an emergency that was your fault.
It’s important to understand the different auto insurance policies offer different options and at different prices. To find the policy that is best for you, and one that is affordable at the same time, it is advantageous to get multiple quotes. Click here to put in your information once and receive various quotes from different auto insurance companies at the same time to help you make the best choice.
