Why Should You Have Auto Insurance Coverage?
Auto insurance coverage protects your family, your vehicle and yourself in the event of an accident. A good auto insurance policy ensures that you are protected financially and can help pay for expensive medical bills related to vehicle accidents. Certain types of auto insurance coverage can also cover the cost of an accident involving an under insured or uninsured motorist.
How much coverage do I need?
Many states require a minimum amount of auto insurance before you are able to drive your vehicle or even obtain a license. State minimums vary but it is important to understand the types of coverage offered, the ways they benefit you and what works for your individual budget. Auto insurance policies should be purchased to cover a variety of possible scenarios and being under insured can cost more overall.
Different Types of Auto Insurance Coverage:
- Property Damage Liability coverage is required in many states. This coverage will pay for any damages done to another vehicle or to property in the event of an accident.
- Bodily Injury Liability covers any medical expenses that may arise as the result of an accident. This coverage can also be used for legal defense costs related to medical claims or loss of life.
- Uninsured or Under Insured Motorist coverage comes in whenever the other vehicle involved does not have insurance, or an adequate amount of insurance, to cover the cost of medical expenses or damage.
- Comprehensive and Collision Coverage covers the cost of damage to your own vehicle. Comprehensive coverage can also pay for damages resulting from theft or acts of nature, such as flooding or fire. This type of coverage is usually required for vehicles with liens, but it is a good idea to have this coverage to protect your automobile investment.
What Other Services Are Available?
Many auto insurance companies now offer Emergency Roadside Assistance, Rental Reimbursement and Lost Wages Reimbursement as add-ons to many of their policies. These types of coverage assist with additional expenses related to an accident or theft, and can help get you back on the road during vehicle repairs. Emergency Roadside Assistance coverage can be used in the event of an accident or a breakdown usually for much less than private coverage. These types of add-ons are generally optional, but can greatly reduce your out of pocket expenses if needed.
A deductible is the amount that you have agreed to pay out of pocket in the event of an automobile accident. This amount depends entirely on the coverage you select, but most policies have a minimum amount. A lower premium can usually be obtained if a higher deductible is selected. It is important to know your deductible amounts, and what you could reasonably afford to pay in the event of an accident.
Factors to Consider When Choosing Auto Insurance Coverage:
- What is the value of your car? Older or less expensive car models may not be worth the higher premiums of full coverage insurance. Newer model cars, leased vehicles or vehicles with liens will benefit from, and often require, more insurance coverage.
- Do you have separate health insurance coverage? If you are injured as the result of an accident the amount of medical care necessary can be expensive. If you do not have separate health insurance, or if your health insurance would not cover an automobile accident, it may be necessary to purchase a bodily injury policy.
- How much can you afford? Knowing your budgetary limits monthly, and in the event of an accident, are crucial factors in determining the right level of coverage. Before purchasing coverage evaluate the reasonable amount you could pay for a premium, and how much you could afford to pay for a deductible if the need arises.