What kind of insurance should you get? Any good insurance agent will tell you to buy as much insurance as you can afford. This is a good rule of thumb, but it's not as useful as the advice of a stock broker to buy low and sell high. Even though it makes sense, it doesn't help you make a better decision. There are a few filters to think about if you want to make an informed choice. First, what is the minimum coverage your state makes you have? Second, what is included in the minimum? Third, what other kinds of coverage are there, and can you pay for them? Fourth, what are you trying to protect?
What are the minimum requirements?
Now that you know what your state requires, what are you actually covered for if you buy the minimum? Using the definitions of coverage that come next, find the types of coverage that are needed and find out what your state says is the accepted minimum.
Coverage: What It Means
Liability for Physical Injury
Covers injuries or deaths to other people that you are responsible for. It also gives you a way to defend yourself in court if someone else in the accident sues you. Claims for injuries to the body can be for things like medical bills, lost wages, or pain and suffering. In case of a serious accident, you want to make sure you have enough insurance to cover a lawsuit judgement against you without putting your own assets at risk. Injury to people is covered by bodily injury liability, not damage to your car. So, it's a good idea to make sure all of your cars have the same level of coverage. Body Injury Liability does NOT cover you or anyone else on your policy. Coverage is only as good as the terms and conditions in the policy.
Coverage for all kinds of physical damage
Covers your car and sometimes other cars you may be driving if something other than a collision causes damage. For example, if your car is stolen or damaged by flood, fire, or animals, comprehensive insurance will pay for the repairs. Pays for repairs to your car, minus the deductible you choose. To keep your premiums low, choose a deductible that is as high as you are willing to pay out of pocket. Coverage is only as good as the terms and conditions in the policy.
Accident Coverage
Covers damage to your car if it hits another car or object, or if it is hit by another car or object. Pays for repairs to your car, minus the deductible you choose. To keep your premiums low, choose a deductible that is as high as you are willing to pay out of pocket. If your car is older, you might want to drop this coverage because it usually only covers the cash value of your car. Coverage is only as good as the terms and conditions in the policy.
Medical Payments
Covers your and your passengers' medical bills if you are hurt in an accident. There may also be coverage if you are hurt as a pedestrian by a car. Not important who is to blame. Coverage is only as good as the terms and conditions in the policy.
Coverage for Uninsured Motorists
Covers you and your passengers if you get hurt in a crash that wasn't your fault and the other driver doesn't have insurance or doesn't have enough insurance. In some states, you can also get coverage for damage to your car caused by someone who doesn't have insurance. Even in states with no-fault insurance, this is a very important coverage to have because so many drivers don't have it. Coverage is limited to the policy's terms and conditions.
Coverage for personal injuries
Covers, up to a certain limit, the insured's, other people's, and people on the street he hits' medical, hospital, and funeral costs. First-party coverage is the basic coverage for the insured's own injuries, regardless of who was at fault. It can only be bought in some states.
Liability for Property Damage
Covers you if your car causes damage to someone else's property. Most of the time, it's their car, but it could also be a fence, a house, or something else. It also gives you a way to defend yourself in court if someone else sues you. It is a good idea to buy enough of this insurance to cover the amount of damage your car could do to another vehicle or object. Coverage is only as good as the terms and conditions in the policy.
Rental Car Reimbursement
Covers the cost of renting a car if your car can't be driven or is being fixed because of an accident that is covered by your insurance.
What else is there? Can you pay for it?
When you were reading the coverage definitions, did you come across a coverage and think, "I need that, but it's not required by state law?" Chances are you did. Can your budget handle the extra cost of these safety measures? Or perhaps a better question is: Can you afford NOT to have these extra protections? You can easily get multiple quotes at CarInsurance.com by just clicking your mouse. Getting a quote is easy, and you can easily add or remove coverage to see how it will affect your budget.
What do you want to protect?
What things do you need to keep from being taken away if you hurt someone or cause damage?
A) The car you drive. If the bank you owe money to thinks this is a valuable asset, you will need both comprehensive and collision coverage.
B) Your total money. Do you have a lot of money to keep safe? If so, you should either put it in a trust or buy as much insurance as you can. If you don't have much or anything to protect, you can get by with less and still be responsible with your money.
But after you decide how much protection you want, you should always ask how much more the next level up costs. Often, you can get a lot more coverage for not much more money.
Auto insurance isn't a big deal. There is no "wow" factor, and the size of your policy won't impress the other gender. But not having enough can mean the difference between being able to pay your bills and going broke. CarInsurance.com is very interested in financial stability, for what it's worth.
