Car insurance plans, unlike health insurance, consist of various categories of coverage, each of which has a unique set of fees and benefits. Because drivers can typically choose different coverage amounts for various elements, it’s crucial to understand which types of insurance are appropriate for you.
Types of Insurance Coverage 101
Before diving in and selecting an insurance coverage plan, you have to ask yourself some questions: How can you know which option to go for? Is it a legal requirement in your state to have coverage? Is there a way you can save money while still getting enough coverage? To help you answer some of these questions, you can consult with seasoned attorneys like Craig Swapp and Associates. Because they deal with insurance companies a lot, and may be able to offer you some guidance in your selection.
Below, we’ll go over five different types of insurance coverage, as well as some money-saving tips based on your car and budget.
1. Liability Insurance Coverage
Liability insurance comes in handy if you get involved in an accident and the crash is ascertained to be your fault. It will pay for repairs to the other party’s damaged property and any hospital bills following the accident’s injuries.
Almost all states stipulate a minimum quota of liability insurance required. However, it is advisable to opt for the coverage that’s a little bit above the bare minimum. This will act as a safety blanket in future if you cause an accident that may exceed the coverage stipulated.
2. Collision Insurance Coverage
With collision coverage, your car’s repairs will be covered if you are in an accident. The collision coverage also pays the market price of the car if it is totaled. Collision insurance varies in some cases. For instance, based on the value and age of your car, collision coverage might not be economically feasible.
However, if you own a more costly or much newer car, collision insurance could even help you get back to life as it was before the accident. Therefore what car you own really plays a significant role here. Keep in mind, however, that collision coverage is a mandatory requirement if you have liens.
3. Comprehensive Insurance Coverage
Suppose your car is damaged by weather, hits a deer, or is stolen? Do you think your insurance company will offset the unforeseen costs? Such accidents are not covered by liability and collision insurance, but instead, that is where comprehensive insurance comes in.
Comprehensive coverage is one of the greatest things to have especially if it fits within your budget. And although anti-theft and tracking technologies on vehicles can lower the cost of this coverage, it is not always necessary, particularly if your vehicle is easy to replace.
Again, like collision insurance, comprehensive insurance coverage is required if you have liens.
4. Personal Injury Protection
Whereas comprehensive coverage isn’t a requirement, Personal Injury Protection (PIP) is mandatory. It exists to cover the associated costs following an accident. Being a PIP holder means that yours and your passengers’ hospital bills are covered regardless of who is liable. It is important to note that not all states offer PIP coverage.
5. Uninsured /Underinsured Motorist Protection
Despite state law requiring all motorists to be covered by insurance, a high percentage of motorists still do not have coverage at all or are not paid up on their premiums, in effect, canceling their insurance. Whereas a motorist could possess liability coverage, several states have minimum coverage requisites that might not cover all accident-related expenses.
This means that you won’t get paid when someone is liable for an accident’s damages, or you’ll get paid less if your damages goes above their coverage upper limit. Uninsured and underinsured Motorist Protection comes in to help offset costs like these.
Research and Get Yourself the Best Deal
After all is said and done, it all boils down to how you conduct your due diligence. Great preparation equals a perfect tailor made insurance coverage plan for you. Once you get that sorted, you’ll be able to go on with your life smoothly knowing that you’ve secured your future.
