Talking With Insurance Companies

When it comes to owning a car, it helps to understand the different types of auto insurance coverage available to you. Understanding your insurance options will help you choose the best coverage options to take care of your needs.

#1: Liability Insurance

If you get into an accident and it is your fault, you will be responsible for covering the costs associated with fixing the other party's vehicle and covering their medical expenses. If you don't have insurance, you will have to pay for those expenses out of your pocket, which can be expensive.

With liability insurance, if you are responsible for a car accident, your insurance will pay the costs of fixing the other vehicle's car insurance as well as their medical expenses. In most states, you are required to carry a minimum amount of liability insurance. You may want to carry more than the minimum amount, though, because if the expenses from an accident exceed the limits of your policy, you will have to pay those expenses out of your pocket.

#2: Collision Coverage

If you get into an accident, your insurance will help pay to fix your vehicle after you pay your deductible with collision coverage. If you have a loan on your car, most lenders will require you to carry collision coverage to protect your loan's collateral, which is your vehicle.

Collision coverage is great when you have a high-value vehicle. However, if your vehicle is older, you need to evaluate how much you spend on collision coverage and if it is worth it. Many individuals with older vehicles don't carry collision coverage, as it is not worth paying for it.

#3: Comprehensive Coverage

Your car can get damaged outside of a vehicular accident, which is where comprehensive coverage comes into play. With comprehensive coverage, if a weather event damages your vehicle or if it is stolen, or if you hit a deer, your insurance will pay to fix your vehicle.

Once again, if you have a loan on your vehicle, your lender will probably require you to carry comprehensive coverage. This is also a type of coverage you should carry when your vehicle has a high resale value, but that you may want to drop once your vehicle's value is only a couple thousand dollars.

#4: Personal Injury Coverage

You should always carry personal injury coverage. With personal injury protection coverage (PIP), if you get into an accident, the medical bills of you and all your passengers will be covered, no matter how is responsible for the accident. Medical bills from an accident can be expensive, which is why you should always carry this type of coverage.

As a car owner, you should always carry liability insurance and personal injury protection coverage. You should consider carrying collision coverage and comprehensive coverage if the value of your vehicle is high.