Before you set off down the road, it is important to review your car insurance policy and to ensure that you have adequate coverage for your needs. Most states have minimum auto insurance requirements, and you may also have additional coverage requirements from your car lender. By understanding what the coverage types are and how they work, you can take steps to properly insure yourself against potentially damaging situations on the road.
The three primary types of auto insurance are liability coverage, collision coverage and comprehensive coverage. The legal requirement in many areas is for liability coverage. Many states require drivers to be responsible for any damages that they cause while driving, and liability coverage only pays other parties for expenses that you create. Liability insurance does not pay for any of your own vehicle repairs, medical expenses or other related expenses. In addition, liability coverage only pays expenses up to the limits of the coverage. With this in mind, you may opt to purchase a higher coverage limit than what is required by law.
Both collision and comprehensive insurance pay for your vehicle’s repair work or for a full replacement. Collision coverage only pays for your expenses if the damage was caused by a vehicular collision. Comprehensive insurance covers damages from a wider range of events. If you have a car loan, your lender may require you to buy one of these types of insurance. Even if you do not have a car loan, this insurance can benefit you because it decreases the amount of money you need to pay if your vehicle is damaged. Remember that optional coverage for towing, rental car reimbursement, personal injury, gap insurance and more are also available upon request.
To maintain coverage, you will need to pay your car insurance premium regularly. In addition, you will need to pay a deductible when filing a claim. Many insurance companies allow you to select your own deductible within a reasonable range. Before you set off down the road again, review your coverage. Make updates as needed to ensure that you have ample coverage for your needs.