Liability coverage
There are two types of liability coverage: bodily injury and property damage. The former pays for all damage caused by an accident involving your vehicle, while the latter is used to cover other vehicles. Liability coverage also pays medical bills for those involved in an accident, as well as you and your passengers. In addition, it can cover lost wages and household services. In some states, liability coverage is a legal requirement.
There are many types of liability coverage. For example, the collision cover reimburses damage caused by physical contact, including objects. Medical payment coverage covers some medical expenses, but not all. A car owner needs to understand what type of coverage is right for her needs. When buying car insurance, you should pay close attention to the amount of deductible you must pay, as well as the limits of the different types of coverage.
Liability coverage is mandatory in most states, but it is often insufficient to protect a driver. The minimum level of liability coverage requires a driver to have personal injury liability coverage for up to one person per accident. For more coverage, you can purchase uninsured/underinsured motorist coverage. This type of coverage will pay you if the other driver is at fault and has no insurance.
Collision coverage
Collision coverage on car insurance comes with a deductible, which is a certain amount that you must pay before the insurer pays out. For example, if you total your car and it costs more than $10,000 to repair, you’ll have to pay $1,000 of the deductible, with the insurer paying the remaining $4,000 afterwards. You can opt for a higher or lower deductible, depending on your preference and budget.
You may not need collision coverage on your auto insurance unless you’ve been in a single-vehicle accident and the other driver is at fault. If the other driver has liability coverage, his insurer will pay for the repairs. With collision coverage you can repair your car quickly. However, it is not so useful for other drivers.
Collision coverage on auto insurance quotes vary based on your location and state. Your policy costs can be considerably lower if you opt for a higher deductible and lower policy limits. Collision insurance can also be cheaper if you opt for lower policy limits. You also need to know how much your car is worth before making this decision. If you have a car worth more than $1,000, you should consider scrapping your collision insurance.
Extensive coverage
If you drive a vehicle, comprehensive coverage is an important part of your auto insurance policy. This insurance covers the damage your car sustains in the event of an accident or theft. It also protects your car from natural disasters and vandalism. In addition, comprehensive coverage covers damage caused by hail damage.
While comprehensive coverage is not necessary for all drivers, many car loans require it. Some lenders will not finance a vehicle for you without comprehensive coverage, which is another reason to have this coverage. If you own a vehicle worth more than $5,000, you may want to purchase comprehensive coverage in addition to collision coverage.
Comprehensive insurance can be useful for major or minor damage, but is not always the best choice. For example, if you are involved in a minor accident involving another car or vandalism, comprehensive insurance may not be necessary. Your comprehensive insurance policy may not cover the cost of a $600 repair. Collision coverage, on the other hand, covers damage resulting from a single-vehicle accident, as well as damage to parked cars and stationary objects.
Uninsured/underinsured motorist cover
An uninsured/underinsured car insurance policy can protect you in the event of an accident involving an uninsured driver. This coverage can also cover damage to your vehicle. Some insurers also allow you to stack uninsured/underinsured coverage on your auto insurance policies. Check with your insurance agent if this is an option for you.
Uninsured/underinsured auto insurance covers medical expenses in the event of an accident involving an uninsured or underinsured driver. This coverage is separate from the liability coverage on your car insurance policy. Most states require this coverage. This is usually sold in combination with a collision cover, but you can also find it separately.
The rate for uninsured motorist coverage varies by state. According to the Insurance Research Council, one in eight drivers in the US was uninsured at some point. The rate in Massachusetts is 3.5 percent, while in Mississippi it is 30 percent. It is important to know the minimum and maximum coverage limits for your uninsured/underinsured motorist coverage. You can buy higher limits, but the premium will be higher.