Do You Need Car Insurance? Here Are Options You Should Be Familiar With

Posted on: 28 November 2022

If you own a car, you must have the requisite insurance before driving on the road. Failure to secure this means that you'll be liable for any damage to your vehicle and any injuries you sustain. Keep in mind that there are many insurance coverage options, and the protection level you'll receive will vary based on the type you choose. Also, depending on your region, some coverages are mandatory, while others are optional. Here are the most common you should recognize:

Liability Insurance Coverage

This car insurance coverage will provide protection if you cause harm to someone else or damage their property up to a certain limit. Remember that many states have a minimum requirement that drivers should buy. Therefore, as much as possible, you should get liability insurance higher than the minimum set by the state. This way, you don't have to pay much out of pocket because of losses surpassing the limit stipulated in your policy.

Collision Insurance Coverage

This is an optional car insurance policy in many states, but if you have an auto loan, your insurer or leasing company may obligate you to purchase it. If you're involved in a crash, this policy will cover repairs up to the cash value of your car, irrespective of the person responsible for the collision. You should also expect compensation for damage arising from your car hitting a stationary object like a garage or fence. Moreover, in the event that your vehicle is totaled after a crash, this coverage will compensate you for the market value of your car at the time of the accident.

Personal Injury Coverage

This insurance plan isn't mandatory in all states, and it is prudent to confirm your state requirements before taking it out. With this coverage, you'll receive compensation for medical expenses arising from the injuries you and your passengers sustain after a car crash. Besides hospital bills, it caters to other costs like funerals, child support, and lost income.

Comprehensive Car Insurance Coverage

This car insurance coverage offers protection against damage unrelated to car accidents. Significantly, the one type of crash it covers is a collision with an animal, e.g., deer. Otherwise, some of the protection you'll receive from this coverage include protection against vandalism, theft, and inclement weather like a hailstorm. If you have a car loan or lease, you'll need to secure comprehensive insurance. Note that this insurance coverage has a deductible, which you'll pay in cash before the insurance company can cover your losses.

When taking out car insurance, you should consider incorporating the coverage options mentioned above. These coverages can help provide you with the protection you need if your car is damaged or you're involved in a crash.


Little-known Insurance Tips

While I have had auto insurance ever since I bought my first car at 16 years old and home insurance ever since I bought my first home several years ago, I have to admit that over the years I knew very little about insurance. I tended to just look at the price of the coverage and sign the paperwork without really looking into the pros and cons of each policy. After my friend was in a car accident recently (thankfully, she is okay!) and she said she had to pay for some of the damage to the other vehicle out-of-pocket even though she had a minimum state coverage auto insurance policy, I decided to put a lot of careful research into insurance policies and what they really offer. I want to help others by sharing the information I have learned on a blog. I hope I can help you!