There are two types of car insurance. Liability insurance and collision insurance are required by law in nearly every state, with the exception of Virginia and New Hampshire. Liability insurance protects you in case of a car accident that is not your fault. Collision insurance, on the other hand, pays for damages caused by an accident – including medical bills – if you are at fault. However, collision insurance doesn’t cover injuries caused by non-collision incidents, like vandalism.
Collision and comprehensive insurance are essential for protecting yourself in the event of an accident. If you have a new car, you may want to consider collision insurance or emergency roadside assistance. Buying additional insurance for your car will help you if it gets stolen or involved in an accident. You’ll need collision and comprehensive insurance if you’re not comfortable driving without it. Remember, some of these plans have deductibles. Higher deductibles may mean a lower monthly rate, but they will cost you more out of pocket if something happens to your car.
When choosing car insurance, you need to decide what coverages you need. The basics are liability insurance, uninsured/underinsured motorist insurance, collision insurance, and comprehensive coverage. These coverages may be optional in your state, but can be purchased from your insurance provider. Liability insurance pays for damage to other people’s cars. Collision and comprehensive coverage pay for repairs to your car. You may also need rental reimbursement and gap insurance.
The most important thing to know about these three types of insurance is their purpose. Liability insurance pays for damages that happen to another person because of an accident. This coverage pays for medical bills for other parties who were hurt in the accident. Comprehensive coverage pays for damage to your car if it hits a tree or other object. This coverage is optional, but some lenders will require it. If you are looking for car insurance, make sure to read your state laws and your lender’s policy.
Another type of insurance is personal injury protection, or PIP. PIP covers your medical expenses in the event of a car accident. PIP may be mandatory in no-fault states, but is optional in at-fault states. It may be worth checking with your insurance agent if you live in a no-fault state. In addition, it can help you cover funeral expenses and lost wages. While it’s not required, it can offer you peace of mind.
Comprehensive coverage is optional, but may be mandatory for a vehicle financed by a lender or leased by a financial institution. Comprehensive coverage pays for repairs or replacement costs caused by a car accident, including damages to the car from a falling tree branch, theft, or an animal. Comprehensive coverage can also help cover medical expenses for other drivers involved in a collision. This type of coverage can be a good choice if you are not able to afford car repairs.