Anything who owns and drives a vehicle whether it’s a car or motorbike needs to have auto insurance both for their safety and the safety of others on the road. In this guide we shall look at some general information regarding auto insurance.
Why do we Need Auto Insurance?
It is a legal requirement in all states of the USA that you have some form of auto insurance – largely to protect others on the road that could be injured due to your driving.
The minimum auto insurance required varies between each state – so ensure you know the laws where you live to make sure you are adequately covered.
Not only is it a legal requirement but having auto insurance ensures that you are not made liable for any damages you cause to another person’s vehicle or any injuries they sustain. Without auto insurance you could potentially be sued for hundreds of thousands of dollars should you cause a serious injury. With this in mind the small payments each month seem insignificant!
What if your car was to be damaged to the point it couldn’t be driven and you couldn’t afford the cost of getting it fixed? Auto insurance, with the right cover, will cover these damages.
Whilst many people go for basic auto insurance required by law that only covers third party damages and injuries, there are many more types of auto insurance that offer more extensive coverage that we shall look at below.
Types of Auto Insurance
There are several different types of auto insurance offering varying levels of coverage to suit different requirements and budgets.
Liability coverage is the minimum auto insurance required by most state laws. There are three main types of liability coverage – property damage liability – covers the replacement and repair of other people’s property if it was your fault; bodily injury liability – covers other peoples injuries and/or death if it was your fault; and uninsured/underinsured motorist coverage – which helps you if the other driver who caused the accident has little or no insurance.
Collision auto insurance covers the repair of your vehicle if you are in an accident in which you are liable.
Comprehensive auto insurance offers the most extensive cover and the insurance company will pay for to repair or replace your car should it be damaged in an accident or by an ‘act of God’ such as vandalism, theft, earthquake or hurricane.
How to Choose Auto Insurance
The first step to choosing auto insurance is to know what the minimum requirements are in your state. 47 of the state require that you have liability insurance whilst 15 including Florida, Maryland, Michigan and New York require that you also have personal injury protection.
Despite the minimum requirements you should however consider buying as much cover as possible to ensure you are protected against any potential damages or injuries.
You need to understand your options to make the best decision when choosing your auto insurance. This ensures you get the best deal at the best price. Never rush into making a decision as you may end up paying for things you don’t want or may not have the best cover for the price.
What do you want from your auto insurance? Do you want a rental car while your damaged car is being fixed? Do you want an extended warranty to pay for parts and labor if your car breaks down? Make a list of the things you want to be covered and find an auto insurance policy that fits these requirements. Many insurance policies can be tailor-made.
When choosing an auto insurance policy you also need to bear in mind how much you can afford to spend on insurance. Assess your options and compare the cost of different insurance policies to see what you can get for your money. Often there isn’t a huge price difference between the minimum coverage and the next level up – which can make a huge different should you have an accident.
How much do you rely on your car? If your car were to be totaled, would you be able to pay to replace it? If not, then you may want to consider getting comprehensive car insurance so that you are not put in any difficulty should your car become un-drivable.