Why you need the different types of car insurance
Every person in this country who drives a car must have car insurance. When you get an auto loan from a bank or credit union, they will require you to carry a certain amount of insurance so they know their investment in you will be covered in the event of an accident. In fact, a bank will put its own brand of car insurance on you if you don’t show proof of other car insurance within a specified period of time. If you bought your car outright or paid off your bank loan, you have more flexibility in the types of coverage you must have. By understanding what the different types of auto insurance are for, you can make a better decision about the coverage you want for your car.
Liability insurance is probably the first thing you’ll want to look at. This type of insurance is required by all states at least to a minimum amount. Liability insurance covers damages to the other party if you cause the accident. Insurance covers the cost of repairing damage to your vehicle, as well as medical bills and lost income as a result of physical injuries caused by the accident. You can get different amounts of liability insurance, and this may depend on your car. If you drive a luxury car, you may want a higher amount of liability insurance because people often look at the car and determine how much money they think they can get from you.
Your bank requires collision coverage, but most states do not. However, it can be very useful for you because it causes damage to your car when your car is hit by something or hits something else. For example, if your teen backs their car into the mailbox while they are learning to drive, damage to their car will be covered. For many people, as a car ages and loses its value, this type of auto insurance excess dwindles until it is eventually eliminated entirely because the car would not be worth repairing at a certain point.
Comprehensive coverage covers the entire vehicle, including something like windshield repair or replacement. This is usually an optional coverage that you can choose if you want.
Some states require uninsured and underinsured motorist coverage. This is because sometimes people only have the minimum amount of coverage allowed by law and it does not fully cover the costs of repairing the vehicle or the medical needs of the accident victims. By having this type of coverage, you can be sure that everyone in your car will be fully taken care of, as will any damage to your car, no matter what level of insurance the other party has.
Keeping your family safe is important to you, and keeping adequate amounts of auto insurance on them is a great way to show how much you care. You can find cheap auto insurance quotes for all of these types of insurance and more by searching the Internet and doing comparison shopping.