Driving is one of those coming-of-age stages whereby independence becomes expensive. Every driver is required to have car insurance and for most of us , it’s an investment we researched thoroughly before making.
What type of coverage should you choose for your car? Well, let’s explore your options.
Types of Coverage
First off, the type of coverage you choose for your car depends on what type of car you have and what you’ll be using it for. Most states have laws that require a minimum coverage plan, so let’s look at the very basics:
This type of coverage is required for the possibility of an accident whereby bodily harm and/or property damage comes to others via your vehicle and usually includes any court and defense costs that might come as a result.
Each state requires a certain amount of liability coverage.
Collision coverage pays for collision-related damage, whether that damage occurred to your own car or someone else’s. It also covers damage incurred by an object (such as a tree or lamp post). Basically put, if your car smashes into something or something smashes into your car, collision coverage pays for the repairs.
Medical coverage pays for the medical expenses related to more serious vehicular accidents regardless of fault. In other words, if you sustain injuries as a result of a vehicular accident, your medical bills are covered.
This type of coverage pays for those incidences whereby damage or loss may occur as a result of something other than a vehicular accident. These include vandalism, theft, natural hazards like fire, flooding, hurricane, etc.
Uninsured Motorist Coverage
In case you were wondering what happens in case you’re hit by someone who does not have any coverage, wonder no more. That’s what uninsured motorist coverage is for.
Because there are people who actually risk their own (and other people’s) property and bodily damage, uninsured motorist coverage exists as a form of protection. Cover all angles.
Underinsured Motorist Coverage
Different than uninsured motorist coverage, under insured coverage exists for cases in which whoever hit you doesn’t have enough liability insurance to cover the expenses.
Rental Reimbursement Coverage
Rental reimbursement coverage provides you with a vehicle while your insured vehicle undergoes repairs after a damage caused by another vehicle, object, vandalism, etc.
What Coverage Do You Need?
(according to your state)
The first step in choosing a coverage plan that suits your needs is finding out what your state laws require. This information will tell you the minimum amount of insurance you need for different types of coverage. For example, most states require a minimum amount of liability, comprehensive, and medical coverage.
Keeping in mind state laws is a natural way to budget your insurance expenses, because the last thing you want is to have a huge car insurance bill at the end of the month.
The most basic insurance policies often combine a couple of different coverage types that work well as a basic coverage plan for most people. These may not include many perks of “extra” coverage, but they’ll be the best investment if all you’re looking for is to abide by the law and insure some protection.
How to Determine Your Coverage Needs?
Turns out, most people actually purchase more insurance than their state requires in order to give themselves a wider range of coverage. That being said, we’ll review what type of coverage you actually need.
Liability insurance is the best type of insurance to get for basic coverage needs, which is why 47 states enforce it by law.This type of coverage is a simple matter of practical protection. You’re going to be on the road interacting with other vehicles. Despite your opinion of your driving skills and level of caution, the fact is that you cannot control other drivers’ behavior, hence accidents are a very likely scenario. Liability insurance will cover damage repair and to a certain extent, medical expenses for bodily damage caused by collision- whether or not the collision was your fault.
Something to pair with your liability insurance is medical coverage. One type of medical insurance required by some states is personal injury protection. Regardless of which coverage you choose, it is important to be covered for medical expenses.
Bottom line: A good guide to use for choosing coverage for your car is knowing your state laws and then determining your budget based on that and including in your plan both liability and medical coverage. This should set you off on the right foot or wheel.