Car insurance is important because accidents never happen on purpose. Some states have minimum insurance requirements. When shopping for an auto insurance policy, it is important to understand the kind of coverage you need, then shop around for affordable car insurance rates.
Top Five Most Common Auto Insurances
Depending on your insurance company and plan, you will face a range of vehicle coverage options. Some policy add-ons, including roadside assistance, rental car coverage, or loan pay-off/gap coverage, can further protect you and may affect your monthly premium. Here are the most common coverage options.
Bodily Injury & Liability Insurance
This is your basic auto-insurance coverage. If you are at-fault for a collision, liability insurance will cover the costs of the other person’s property repairs and medical expenses resulting from the accident. Your liability insurance will have a pay-out limit. Once you hit that limit, the rest of the bills are your responsibility. Some states have a minimum requirement for liability coverage. For extra protection, you can usually elect to pay a higher premium for a higher liability pay-out.
Adding collision insurance to your policy can cover the costs to repair or replace your vehicle after an accident or other damage included in your plan. Just like your HMO, collision insurance requires a deductible–a set amount you will pay toward to the repair. Deductible rates can affect your premium: If you want collision insurance with a low deductible, your regular monthly payment may be higher (What is Collision Coverage).
Uninsured Motorist Protection
Not everyone has auto insurance, and if an uninsured driver damages your car, you may be left holding the bill. Uninsured motorist protection can help with medical and repair costs if you are in an accident with an uninsured or underinsured driver.
Personal Injury Protection
Medical bills are expensive; personal injury protection can provide financial assistance for car accident injuries. While some medical insurances will also cover hospital and physician fees (sometimes at a lower cost), personal injury insurance can cover additional financial aspects, including: Income continuation, funeral costs, and childcare (What is Personal Injury Protection?).
Damage can occur to your car both on and off the road. Depending on your insurance company and plan, comprehensive insurance can cover vehicular damage resulting from: Weather, theft, fires, animal collision, falling objects, etc. (Auto Insurance Buying Guide; What is Comprehensive Coverage).
I also recommend these car coverage videos from Allstate, and these auto insurance tips from Progressive.
Auto Insurance Buying Guide. (n.d.). In Progressive.com. Retrieved from http://www.progressive.com/auto/progressive-car-insurance-buying-guide/
What is Collision Coverage? (n.d.). In Allstate.com. Retrieved from http://www.allstate.com/auto-insurance/collision-coverage.aspx
What is Comprehensive Coverage? (n.d.). In Allstate.com. Retrieved from http://www.allstate.com/auto-insurance/comprehensive-coverage.aspx
What is Personal Injury Protection? (n.d.). In Allstate.com. Retrieved from http://www.allstate.com/auto-insurance/personal-injury-protection.aspx