How to Choose Auto Insurance Coverage - Updated for 2019
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Choosing your auto insurance coverage can be a tricky process if you don’t know what’s available. You’ll want to choose coverage that will prevent you from paying for damages straight from your pockets, but you also want to choose coverage that won’t break your budget every time you renew the policy. It’s up to you to decide which additional coverage to purchase, and it’s wise to know what’s offered. Each driver’s policy will differ from the next driver, but generally everyone wants one same thing — to be protected in the event of an accident.
Besides your state’s minimum liability requirements, there are other things you can add to your policy that will safeguard you from needing to pay for any expensive repairs. These range from protection from uninsured drivers, assistance with future rental cars, and even assistance with medical bills. While there are many options to add to your auto insurance policy, some are more necessary than others and are highly recommended auto insurance coverage.
Why should you search out additional coverage, only to increase your rates? We all hope to avoid any misfortunate accident, but we cannot control how other people drive despite our safe efforts. The laws vary from state to state, but in some states it doesn’t matter who is at fault for an accident; each party may be responsible to pay for their own damages. Also, if you have additional people on your policy (a spouse or your teenagers) you can’t direct their driving all the time either. Accidents happen, and it’s best to be prepared and ready before it occurs.
Below you’ll find a list of recommended car insurance coverage you can include in your policy. Each one comes with an additional fee added to your policy cost, but in most cases that additional fee is worth paying. Not only will you get more coverage and possibly pay less for damages, but you will have more peace of mind as you drive to and from your destinations.
Bodily injury liability is required by all states for the driver to carry in a specific minimal amount. This coverage will pay any medical expenses the other party experiences due to an accident that was your fault, up to the purchased amount. If the medical expenses are above the limit you purchased, you will be required to pay for the remaining balance of the medical bills.
Property damage liability is also required by all states. This coverage will pay for the damages of any other person’s property that you have damaged. This property includes not only vehicles, but buildings or other structures that you hit with your vehicle. It does not include any payment towards repairing your vehicle in an accident, only the other party’s property.
Uninsured/underinsured motorist liability (bodily and/or property) will help pay for your damages (property) or medical expenses (bodily) if the driver that hit you does not have auto insurance or does not carry enough coverage to pay for your entire bill. Obtaining this coverage will prevent you from paying for your bills out-of-pocket, up to the amount you’ve purchased.
Uninsured property damage provides coverage much like the coverage discussed above. When an uninsured driver damages property, the repairs to the property will be taken care of, but only to a small limit.
Personal injury protection is required by some states. This covers any medical or funeral expenses incurred by the policy holder, members of the policy, or even any pedestrians hit by the policy holder. In addition to this list, any other passengers who are in the vehicle at the time of the accident are also covered up to the limit purchased. This type of coverage is especially beneficial for anyone who frequently drives a carpool, since this allows the passengers to be covered and will be less inclined to hold you responsible for additional medical fees. In some states there are a range of choices involving personal injury protection so check your state’s requirements.
Collision coverage will protect your vehicle by paying for damages done to your vehicle when you’ve hit a car or other object. You will first be responsible to pay your deductible, and then your vehicle’s repairs will be paid for by your auto insurance company up to the specified limit you purchased.
Comprehensive generally covers your vehicle when it has been damaged by something other than a car accident. This can include damage done by animals, Acts of God (flood, fire), or if your vehicle was stolen. Although this coverage is not required by any state, it is required by the loan holder if you are leasing or financing your vehicle.
Medical payments covers you and your passengers’ medical expenses as a result of the accident, as well as injuries resulted from a vehicle hitting you as a pedestrian. These apply no matter who was at-fault of the accident. This type of coverage is sometimes used in place of regular health insurance, so it may not be completely necessary to you if you already have health insurance.
Custom parts and equipment coverage will protect permanent after-market parts you put in or on your vehicle that weren’t from the original manufacturer. These parts can include custom wheels, stereo parts, roll bars, or custom paint. It’s best to get the specific list from your auto insurance provider.
Emergency road service is only available after you’ve purchase collision or comprehensive. This coverage is very detailed according to your insurer. Any towing or labor that may be required may only be covered once a claim has been made.
There may be more options offered by your auto insurance company, so be sure to ask what they have and carefully evaluate the pros and cons of adding each to your policy. Understanding auto insurance isn’t as hard as it initially seems when you do a little research about it. Everyone has an opinion on what car insurance coverage recommendations should be and it’s up to you to decide what’s best for your policy.