Auto insurance is a necessity for many people, and it offers protection against physical and bodily damage, and liability. There are three basic types of coverage: comprehensive, collision, and uninsured/underinsured motorist. The most important thing to remember is that the coverage you choose is dependent on your personal financial needs and preferences.
Property damage liability
Property damage liability insurance is a type of car insurance. It helps pay for repairs after an accident, and may even cover the cost of a rental car if the other driver is not insured. The amount of property damage liability coverage you have depends on your state’s requirements, but most states require at least the minimum amount.
When you purchase a policy, you typically choose how much liability you want. Some people opt for more liability coverage, especially if they live in an expensive part of the country. You can increase your liability limits for a relatively small premium increase, which can help you keep from being responsible for costs you can’t afford after your coverage limits are exhausted.
Typical liability limits for property damage coverage range from $5,000 to $100,000. Depending on the car you drive, you may need higher levels. Increasing your liability limits will also give you peace of mind and extra support after an accident.
Collision coverage is a great way to protect yourself from having to pay out of pocket in the event of an accident. Whether you were at fault or not, collision coverage can cover your car’s repairs.
The amount you pay is called your deductible. You’ll choose a deductible at the time you sign up for your policy. By paying a higher deductible, you can lower the cost of your insurance.
If you decide to drop collision coverage, you’ll have to evaluate your personal situation and determine if the savings are worth it. If you’re still in a good financial position, you may be able to save money to cover the repairs to your vehicle.
Collision insurance can be confusing. This is especially true if you’re a teen. While it can give you peace of mind, it’s important to understand exactly what it covers.
It’s also important to consider how much your car is worth. After all, if your car is just ten years old, its value is going to drop pretty quickly.
Comprehensive coverage is an optional type of auto insurance that provides coverage for damages to your car that are not caused by a collision. Unlike collision coverage, comprehensive coverage does not pay for injuries to other people. However, it does cover damages to your car that are caused by other factors.
Depending on where you live, you may have to purchase comprehensive coverage to protect your vehicle. The price of this coverage can vary based on where you live and your car’s value. If you live in a high-risk area, you may have to pay more for comprehensive coverage.
In order to make sure you are paying for what you need, you should check with your car’s lender or auto financing company to find out if they require comprehensive coverage. You can also get quotes from insurance agents. Many companies provide additional types of coverage for a fee.
One reason you might not want to purchase comprehensive coverage is if your car is very old and has very low value. Typically, a newer car will be more expensive to repair. Also, if your car has been in an accident, the car’s worth will go down.
Uninsured/underinsured motorist coverage
Uninsured/underinsured motorist coverage on auto insurance can help protect you and your vehicle in the event of an accident. Several states require you to purchase this type of insurance. The costs can vary, however, depending on the state.
It can cost a few dollars to add this coverage to your policy. However, it can save you thousands of dollars in the long run. If you are involved in an accident with another driver, this type of insurance can cover medical expenses and vehicle repair costs.
The amount of uninsured/underinsured motorist insurance you will need will depend on your location and the coverage limits you choose. Typically, drivers opt for the same limits on their liability coverage as they do on their uninsured motorist coverage.
Some states only require you to purchase uninsured motorist coverage, while other states have additional requirements. When you shop around, look for an agent who can explain how the policy will work in your state.