How much car insurance do you really need? It’s a question that you should certainly ask before you take out a new insurance policy or renew your existing one. Start your journey by taking a look at the following common types of coverage that you may or may not require.
Whether you decide to purchase a policy entirely online or work through an agent to get your auto insurance, you should first familiarize yourself with the different types of insurance coverage that are available to discern whether you actually need all of the coverage types.
You may not. And if you don’t need certain coverage, you could potentially save a lot of money. On the other hand, you may decide that it’s worth paying more so that you are as fully protected as possible.
One type of insurance you definitely need is liability insurance. In fact, it’s legally required in almost every state in the U.S.
Liability insurance includes both bodily injury liability coverage and property damage liability coverage. So, if you cause a road accident, your liability insurance will pay for the other driver’s costs. It can also cover your legal expenses in the event that you face a lawsuit after causing a car accident.
Personal Injury Protection
Twelve states legally require you to have Personal Injury Protection. So, if you live in Delaware, Florida, Hawaii, Kansas, Massachusetts, Michigan, Minnesota, New Jersey, New York, North Dakota, Oregon, or Utah, you need to have PIP.
The coverage covers medical costs for you and any of your passengers after a road accident, regardless of who caused the accident. It can also pay towards related costs, like childcare and lost earnings. Even if PIP is optional in your state, it’s usually a good idea to take out PIP coverage.
Uninsured and Underinsured Motorist Insurance
If you’re involved in a hit-and-run accident or you collide with a driver who doesn’t have enough insurance in place to cover all the costs of the damage he or she causes, it can be very helpful to have both uninsured motorist insurance and underinsured motorist insurance in place.
It’s usually a good idea to get this coverage even if it isn’t required by law because it doesn’t cost a huge amount more to add to your insurance policy and it protects you in such situations as those mentioned above.
You may be legally required to have uninsured and underinsured motorist insurance anyway. Uninsured motorist insurance is currently required in twenty states, while underinsured motorist insurance is required in fourteen states.
Collision insurance covers damage to your vehicle after you’re involved in a road accident.
If your car is leased or financed, it can be a good idea to get collision insurance. If you can’t afford to replace or repair your car after an accident, it’s also worthwhile considering this insurance option.
But bear in mind that collision insurance comes with a deductible, which is the amount that you will have to pay out of pocket before your insurance company will pay the rest.
Your car could become damaged as a result of something besides a collision. In that event, you’ll need to have comprehensive compensation in order to make a claim.
So, by taking out comprehensive insurance, you can protect your vehicle against theft, damage caused by bad weather, vandalism, and damage caused by wildlife.
If you can’t afford to replace your car out of pocket when disaster strikes or if you simply live in an area that has a high rate of vandalism or theft, getting comprehensive insurance can be a good idea.