If you want to drive a car in the United States, something you must have is car insurance. This is, in fact, mandated by the law. While the question of whether or not to buy auto insurance is an easy one, choosing the right policy can be much more difficult. Many people may be left wondering exactly how much coverage for their vehicle they need. Answering that question requires understanding the different kinds of auto insurance available.
Liability Coverage
One kind of car insurance you should certainly have is liability coverage. This refers to insurance coverage that pays out to cover the damage done by your vehicle to other people and their property. While this kind of coverage is typically mandated by the law, how much liability coverage you are required to purchase may not be beyond a small amount. Overall, it’s a good idea to get a good deal of liability coverage. Damage to others, their car or other property is likely to happen in an accident. These bills can add up quickly, and you do not want to be paying to reimburse those expenses out of your own pocket.
Collision Coverage
Another form of car insurance you need to invest in is collision coverage. Unlike liability coverage, collision coverage may be optional. It will pay for damage done to your car in an accident after colliding with another car, an animal like a deer, or even a stationary object like a telephone pole. The coverage will typically pay out enough for repairs to fix the damage. If the car is a total loss, this kind of car insurance may pay for a complete replacement instead.
Comprehensive Coverage
A third kind of car insurance coverage is known as comprehensive coverage. This is coverage that will pay for things not covered by collision coverage or liability coverage such as theft, damage done by inclement weather, vandalism, or fire. This kind of coverage is optional, but it’s probably a good idea to purchase it since all these things can certainly harm your car. Making a comprehensive coverage claim also typically involves paying an out of pocket deductible.
Under-Insured Motorist Coverage
A fourth kind of auto insurance you should probably invest in is under-insured motorist coverage. This is insurance coverage that protects you if you were to get into an accident with a driver with either no insurance or so little coverage that it would not cover your bills after the accident. It can pay for things like repair bills or medical bills. This kind of insurance is required in some states but not every state.
There are also other kinds of auto insurance coverage you should be aware of. This includes things like personal injury protection coverage, medical payments coverage, gap coverage, and towing coverage. Overall, be careful regarding the coverage you do purchase. Do your research. Only with proper research will you be able to determine the optimal amount of coverage you need to meet your needs.