If you have a car, chances are you've got a lot of different things to think about, including the importance of car insurance. There are many types of coverage you can get, from collision to comprehensive, and even personal injury protection. Read on to learn more about the different kinds of coverage and the benefits of each.
Liability coverage
Liability coverage is the foundation of most auto insurance policies. It pays for injuries and property damage caused in an at-fault accident. There are a number of factors that determine the cost of liability coverage.
The minimum limits vary from state to state. Some states require you to have at least $25,000 of liability insurance, while others require $50,000.
Purchasing more liability coverage is not only an important step in protecting your assets, but it can also help to prevent you from being sued in the future. Your insurance company will defend you against any third-party claims.
If you are involved in an at-fault accident, your car will be repaired. You can choose to purchase collision coverage, which pays for repairs to your vehicle. Comprehensive coverage, on the other hand, covers damages caused by other than a crash. This coverage may include vandalism, natural disasters, or theft.
Collision coverage
Collision coverage is a form of insurance that pays for damage to your car in the event of an accident. It is a mandatory requirement in some states, and is also optional in other jurisdictions. This kind of coverage can help to make the sting of a hefty repair bill go away.
There are several types of collision coverage, and it can vary in price depending on the insurer, the vehicle, and your driving history. The cost of a collision insurance policy is usually a percentage of the total value of the vehicle. You may be asked to pay a deductible before the insurance company will cover the costs of your repairs.
Insurance agents are happy to discuss the finer points of a collision policy with their customers. They will usually offer a list of monthly payment options, and can discuss the benefits of adding a collision plan to your auto insurance.
Comprehensive coverage
A comprehensive car insurance policy can give you peace of mind in the event of a collision, and can cover a number of other costs. This is especially helpful if you live in a state with a high rate of natural disasters, or if you own a very valuable vehicle.
Collision coverage, on the other hand, provides coverage for damage that occurs when a vehicle is involved in a crash or hit by an animal. The deductible is typically $500.
For example, if you have a $600 deductible, you will need to pay the first $500 before your insurer will pay the rest. You may want to consider raising the deductible to save yourself a few extra bucks.
Personal injury protection
Personal injury protection (PIP) is coverage that pays for medical costs related to a car accident. Depending on the state, PIP is required or optional. It can also cover passengers and pedestrians.
Aside from medical expenses, personal injury protection may also pay for lost wages, funeral costs, and other services. Depending on your state's regulations, some insurers offer combined limits. Regardless of the amount of coverage you have, you'll need to alert your insurer of an accident. Your insurance company will have a limited number of days to investigate your claim.
Personal injury protection is a good way to avoid paying high medical bills after an accident. It can also help with lost wages, and is an important component of car insurance. However, it does not cover damage to your property.
Uninsured or underinsured driver coverage
If you have uninsured or underinsured driver coverage on your car insurance, you can help protect yourself against damages and injuries in an accident. This type of coverage is generally less expensive than liability insurance. You can save thousands of dollars by purchasing this coverage.
The amount of money you can recover through your uninsured or underinsured motorist coverage will depend on your policy. It will also vary by state. Typically, drivers use the same limits for their uninsured motorist coverage as for their liability insurance.
Regardless of how much you are covered for, you should always report an incident to your insurance company. Your insurer has a duty to investigate the claim and make a determination if you were at fault for the accident.
