Car Insurance Coverage
So, you’ve bought a car and now you need to get it insured but there are seven types of car insurance coverage, which one should you get? This article will try to offer brief descriptions of each of them so that you will know which of these types you need. Let’s start with the liability insurance.
Liability insurance – the state that you live in will ask you to carry some sort of insurance for your vehicle and in most cases they’re looking for this type, liability insurance. If you have an accident and the local authorities (police) decide that you are to blame for the incident, this liability insurance will cover the cost of fixing any properties that have been damaged due to this accident, as well as paying off the medical bills that resulted from the injuries. Most of the states in the U.S. have a minimum requirement for this type of insurance which you must have. We highly recommend that you go beyond this minimum limit if you can afford it. The reason for this is because you will be held responsible for any of the claims that exceed that limit. It is up to you to decide how much to pay.
Collision insurance – getting only liability insurance is a great risk for you because if you are involved in an accident, there are chances that you will ran out of money before fixing your own car. For this reason, you should get collision insurance which will pay for the repairs on your car. If the vehicle gets totaled in the accident, the collision policy will pay out the value of your car. If you have an older car, collision insurance may not be worth getting, especially if you can save up some money to get it replaced. However, if you have a newer car that is expensive, collision insurance is a must.
Comprehensive insurance – the first two types we’ve talked about will cover car accidents. But what happens if your car gets stolen? Or suffers from weather damage? The above two policies won’t get you covered. For these and others as well, you’ll need comprehensive insurance. Usually, it is quite pricey but always a nice addition that will help you sleep much better during the night.
Medical protection – you probably know that the costs with treating the injuries resulted from a car accident can be very high. Medical / personal-injury protection will cover these costs, regardless of who is to blame for the accident.
Uninsured motorist protection – although the law says that everybody must have insurance it does not actually mean that this is the way how things are going. Even though a certain driver has a liability insurance policy, most of the states in the U.S. have low minimums and usually, they don’t cover all the expenses. Probably the most frustrating thing is to be obliged to pay the bills even though you are not the person to blame for the accident. Theoretically speaking, even if you do not have enough insurance in order to cover the damages that have occurred during the accident, you will still be obliged to cover the costs from your own pocket.
Gap insurance – if the car that you drive is still not yours, this type of insurance would be the best choice for you. It was created for those drivers who are still making payments on the car and have to pay off the vehicle if it gets totaled in an accident.
No-fault insurance – this type of insurance is available at the moment in only 12 states in the U.S. Simply put, it covers property damage and injuries, regardless who was responsible for the accident. Some of these policies are quite pricey and is recommended only if you own an expensive car. Otherwise, stick to the regular coverage.
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