Liability coverage
There are two kinds of liability coverage: bodily injury and property damage. The former pays for any damages caused by an accident involving your vehicle, while the latter is used to cover other vehicles. Liability coverage also pays for medical bills for those involved in an accident, as well as for 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 instance, collision coverage pays for damage caused by physical contact, including objects. Medical payments coverage covers some medical expenses, but not all of them. A car owner should understand which type of coverage is right for her needs. While buying auto insurance, you should pay close attention to the amount of deductible that you have to pay, as well as the limits of the different types of coverage.
Liability coverage is mandatory in most states, but it is often inadequate to protect a driver. The minimum level of liability coverage requires a driver to carry bodily injury liability coverage for up to one person per accident. For more coverage, you can purchase uninsured/underinsured motorist coverage. This type of coverage reimburses you if the other driver is at fault and does not have insurance.
Collision coverage
Collision coverage on auto insurance comes with a deductible, which is a certain amount of money that you have to pay before the insurer pays out. For example, if you total your car and it costs more than $10,000 to repair, you will be required to pay $1,000 of the deductible, while the insurer will pay the remaining $4,000 after that. You can choose a higher or lower deductible, depending on your preferences 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 was at fault. If the other driver has liability coverage, then their insurer will pay for the repairs. Collision coverage helps you repair your car quickly. However, it is not as useful for other drivers.
Collision coverage on auto insurance quotes vary based on your location and state. Your policy costs can be significantly lower if you choose a higher deductible and lower your policy limits. Collision insurance quotes may also be cheaper if you opt for lower policy limits. You should also know how much your car is worth before making this decision. If you have a car worth more than $1,000, you may want to consider dropping your collision insurance policy.
Comprehensive coverage
If you drive a vehicle, comprehensive coverage is an important part of your auto insurance policy. This type of insurance covers damages your car suffers in the event of an accident or theft. It also protects your car from natural disasters and vandalism. In addition, comprehensive coverage will cover losses incurred due to hailstorm damage.
While comprehensive coverage isn’t necessary for all drivers, many car lenders require it. Some lenders won’t finance a vehicle for you without comprehensive coverage, which is another reason to have this coverage. If you own a vehicle that’s worth more than $5,000, you might want to purchase comprehensive coverage in addition to collision coverage.
Comprehensive insurance can be helpful in cases of major or minor damage, but it is not always the best choice. For example, if you are involved in a minor accident involving another car or vandals, comprehensive insurance may not be necessary. Your comprehensive insurance policy might not cover the cost of a $600 repair. Collision coverage, on the other hand, will cover damages that result from a single vehicle crash, as well as damage to parked cars and stationary objects.
Uninsured/underinsured motorist coverage
Uninsured/underinsured auto insurance coverage can protect you in the event of an accident with an uninsured driver. This coverage can also cover the damages to your vehicle. Some insurers also allow you to stack uninsured/underinsured coverage on your auto insurance policies. Check with your insurance agent to see if this is an option for you.
Uninsured/underinsured auto insurance coverage pays for medical expenses in the event of an accident involving an uninsured or underinsured driver. This coverage is separate from the liability coverage on your auto insurance policy. Most states require this coverage. It is usually sold in combination with collision coverage, but you can also find it separately.
The rate for uninsured motorist coverage varies by state. According to the Insurance Research Council, one out of every eight drivers in the U.S. was uninsured at some point in their lives. 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 on your uninsured/underinsured motorist coverage. You can purchase higher limits, but the premium will be higher.