Having the right auto insurance is just as important as making sure your engine is running properly. Every time we get behind the wheel we run the risk of being involved in an incident that might require you or someone else to take out an auto insurance claim. Driving without auto insurance is not only a financial liability, it is also the law. In all 50 states drivers are required to carry auto insurance. Anyone caught driving without this insurance is subject to severe legal repercussions.
Types of Coverage
The main reasons to purchase auto insurance are to protect yourself and the investment you have made in your vehicle. Depending on the type of insurance you purchase, your insurance company may pay for repairs to your car, repairs to another person’s car or multiple other cars. Auto insurance can also cover the medical expenses for you or anyone else involved in an accident. When you purchase auto insurance it is important to remember that if you are determined to be at fault for an accident you could be held responsible for covering damages to other people’s vehicles and medical expenses.
Comprehensive auto insurance provides the most coverage. This type of insurance will cover almost any type of expense that could be involved in an automobile accident including theft, medical expenses and vehicle repairs. Because comprehensive insurance covers so much it is the most expensive auto insurance option.
There are some insurance companies that will allow you to “mix and match” aspects of different policies to create a customized auto insurance plan. Other companies require individuals to choose from pre-determined options.
The types of coverage you will need to consider purchasing include:
- Personal injury: As the name implies, personal injury insurance covers any medical expenses you incur if you are involved in an accident.
- Collision: This type of coverage pays for physical damage to your vehicle.
- Bodily injury and liability: Bodily injury and liability insurance will cover the medical expenses of anyone else involved in the car accident if you are found to be at fault. Most states require all drivers to carry this type of insurance.
- Uninsured or underinsured motorist: Uninsured or underinsured coverage will pay for collision-related expenses if the other driver is found to be at fault and that driver does not have adequate insurance coverage to pay for the victim’s expenses.
What to consider before purchasing auto insurance:
It is wise to consider what your needs are before you begin to speak with different insurance companies to shop for an auto insurance policy. Factors you need to consider include:
- How often you drive your vehicle
- What amount you can afford to spend on auto insurance
- How much you will be able to pay for out of pocket if you are involved in an accident
- How much you owe on the car
Your budget should be your starting point when you consider what type of auto insurance to purchase. Remember at the very least you should have liability insurance as required by law. When you speak with representatives from insurance companies be sure to ask what types of discounts you might qualify for so that you can get the most coverage for your money. Once you find a policy that is right for you, remember that you should continue to re-evaluate your auto insurance on a regular basis.