Car insurance is an important part of owning a car. It’s also a necessary expense, meaning you’re legally obligated to buy insurance if you own and drive a car. Beyond that, it’s just a smart practice, and you need to make sure you have enough coverage. There’s nothing worse than finding out after you get in an accident that you were underinsured. To make sure you buy enough auto insurance, here are some tips and information you should know.
The Types of Insurance
There are several different types of auto insurance. While the required minimum insurance can vary from state to state, you will probably want to buy a little more insurance than the state requires. This will ensure that you have enough coverage for car repairs and any medical bills that come in after an accident. Here’s a look at the different types of coverage.
Property Damage Liability Coverage
This type of coverage helps with expenses when you’re at fault in an accident. It will cover any damages to other people’s property that you caused. It does not cover your vehicle or the people in it.
Bodily Injury Liability
If there are any injuries as a result of a crash that is your fault, bodily injury liability insurance will cover it. For example, if you hit another car with three people in the vehicle, the insurance would pay for their medical expenses. Again, this does not cover your personal medical expenses.
Personal Injury Protection
This type of protection covers you and the passengers in your car. If you or any of your passengers are injured this insurance will pay for it. It can also cover lost wages if you have to miss work.
Uninsured or Underinsured Motorist Coverage
If you are hit by someone driving without insurance or the damages are more than their insurance will cover, this will help make up the difference.
Collision insurance coverage will pay for any needed repairs to your car after an accident. This means that if you hit someone your car’s repairs will be paid for by your insurance company or if someone hits you.
If your car is damaged in an incident that is not a road collision, then this insurance will kick in. This means it’s covered if it gets stolen, vandalized, or involved in some kind of natural disaster or other disturbance.
What Do You Actually Need?
With many cars costing well-over the state minimum insurance requirements, it’s smart to buy a policy that covers more than the state minimum. But how much more coverage do you need? Well, that depends on the type of vehicle you have, the areas you live in, and a variety of other factors. Generally, any vehicle that’s has significant value on it should be covered. Even if you have a car that isn't worth very much money, it's smart to get some personal injury protection and some additional coverage in other areas.
A good person to talk to about your insurance needs is your financial advisor or your insurance agent. Your financial advisor will be able to tell you how much coverage is smart for your family. Don't have a financial advisor? Call your insurance company to discuss your needs with an agent. He or she can explain the amount of insurance needed for your car legally and make recommendations for further coverage. Once you know how much insurance is recommended, you can shop around and see who can offer you the best price for that amount of insurance.