Car insurance: why is it necessary and what type to take out


Choosing the right auto insurance for you is all about finding the best combination of price and coverage.

Nipitphon Na Chiang Mai/EyeEm


Auto insurance protects your property in the event of an accident. Yet insurance is a complex product that can leave you with many questions. For example, how much should you spend on car insurance? What types of coverage should you get?

The average driver spends about $1,000 a year on car insurance. You can spend more or less than this amount. Keep in mind that your state may require you to purchase certain mandatory coverages.

If you’re looking for auto insurance or just want to see what other options are available to you, getting started is easy. See pricing, get a free quote, and start saving money.

To make the most informed decision, it helps to understand what types of coverage are available to you and why it is important to have it.

Common Types of Car Insurance Coverage

Choosing the right auto insurance for you is all about finding the best combination of price and coverage. Ideally, you should aim for enough coverage to meet your needs at the lowest price.

Compare quotes from several insurers to determine the best price. Just be sure to use the same types of coverages, minimums, deductibles, and other policy settings when getting quotes, so you’re comparing apples to apples.

Not sure what insurance coverage you need? There are countless options, and working with an agent to determine your needs is usually a good idea. To help you get started, here are six main types of auto insurance coverage to consider.

responsibility

As the name suggests, liability insurance pays for covered damages and injuries when you are held responsible for an accident. As mentioned earlier, most states require you to have auto liability insurance.

There are two types of liability coverage:

  1. Bodily Injury Civil Liability (BI): If you cause an accident, bodily injury liability insurance can help cover injuries to the other party, including their medical expenses, lost wages, and pain and suffering.
  2. Property Damage (PD) Liability: PD coverage can cover damage you cause to other people’s property as a result of an accident.

Complete

The purpose of comprehensive auto insurance is to cover many types of losses that do not arise from an automobile accident. For example, your comprehensive coverage may cover damage to your vehicle caused by covered events, which typically include:

  • Flight
  • vandalism
  • Hail
  • Fire
  • Falling trees or other objects
  • Hit a deer

Typically, full coverage comes with a deductible (the amount you have to pay out of pocket before your insurance coverage kicks in).

If you want to learn more about this particular type of coverage, contact an insurer today. They can provide information on costs, deductibles, coverage and more.

collision

Unlike liability insurance, which covers damage to the other party, collision damage waiver can pay for damage to your vehicle. Whether you hit another vehicle or an object, collision coverage can cover the cost of repairing or replacing your car after you pay your deductible.

Collision coverage is usually optional, but if you finance your vehicle, your lender or lessee may require you to carry it.

Underinsured/Uninsured Motorist (UMC)

UMC coverage is basically a liability policy to protect you against drivers who drive without insurance or don’t have enough liability coverage to cover your medical expenses. In some states, your UMC coverage may also help pay for damage to your vehicle.

Depending on your state, uninsured and underinsured motorist coverage may be mandatory or optional.

Medical payments (MPC)

Medical payment coverage can help pay for medical treatment of injuries you or your passengers sustain as a result of an accident. Covered treatments may include doctor’s visits, surgery, x-rays, ambulance transport, emergency medical technician and other services.

The medical payment has a limit per person, which means that you will have to pay the costs beyond the limit of your insurer.

Personal Injury Protection (PIP)

Like medical expense coverage, personal insurance protection can cover your medical expenses in the event of an accident. However, unlike MPC, Personal Injury Protection can pay for lost wages, childcare, or other expenses caused by your accident-related injuries.

Also known as PIP or No-Fault Insurance, Personal Injury Protection can pay medical bills no matter who is at fault in an accident. It covers you even if no other party is involved in an accident.

When you pay your auto insurance bill, it’s for a benefit you hope you never get. Nevertheless, auto insurance is a valuable and necessary tool you should have if you drive a car, whether to meet state law, your loan requirements, or your own personal protection needs. responsibility.

Reasons to have car insurance

If you are at fault in a car accident, how would you pay for specific losses such as damage to the other party’s vehicle or medical expenses? How would you pay for your legal defense if the other party sues you for the accident?

Simply put, car insurance is necessary if you drive a car to help pay for covered losses and to protect you legally and financially. Other reasons to purchase auto insurance include:

  • It’s the law: Almost all states require drivers to have property damage (PD) and bodily injury (BI) liability coverage, although coverage types and minimums may vary from state to state. The consequences of driving without insurance can include fines of up to $5,000, suspension of driver’s license and vehicle registration, vehicle impoundment, jail time and other penalties.
  • Your lender or leasing agent may require insurance: If you’re leasing your car, your lender or rental agent may require you to purchase comprehensive coverage and collision coverage to protect their investment.
  • Insurance protects you from the cost of repairs: Comprehensive or collision insurance can save you from having to use your own money to pay for damage to your car. For example, if your car is stolen or damaged by bad weather, insurance can cover the cost of replacing or repairing your vehicle, so you don’t have to.
  • Insurance helps you when an uninsured motorist causes an accident: According to the Insurance Information Institute, nearly 13% of American drivers do not have car insurance. Uninsured motorist coverage can help you cover vehicle damage and medical expenses resulting from an accident caused by an uninsured driver.
  • Car insurance can cover your passengers: Medical payment coverage and personal injury protection can help cover medical costs for you and passengers injured in an accident.

You have more questions ? Or do you just want a new quote to compare to your existing policy? Contact an insurer today and start saving money.

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