Depending on where you live, some auto insurance coverages are mandatory and others are optional. It can be difficult to know what types of coverage you need and how to save money while still having the right amount of coverage. Here are five types of coverages and scenarios where you would benefit from having non-mandatory coverage added to your policy, along with some tips for saving money depending on your vehicle and budget. Liability insurance covers you in the event that you are in a covered car accident and it is determined that the accident is the result of your actions.
Liability insurance will pay for the cost of repairing any property damaged by an accident, as well as medical bills for resulting injuries. Most states have a minimum requirement for the amount of liability insurance coverage drivers must have. However, if you can afford it, it is generally a good idea to have liability insurance that is above your state's minimum liability coverage requirement, as it will provide you with additional protection in the event that you are found at fault for an accident, as you are responsible for any claims that exceed the upper limit of your coverage. Collision coverage will pay for your car repairs if there is a covered accident.
If your car suffers a total (when the repair cost exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car. Comprehensive (non-collision) coverage will pay for losses that are not related to a covered accident, such as weather damage, hitting a deer, or theft. Another problem that may arise is that while a driver may have liability insurance, many states have relatively low minimum coverage requirements that may not be enough to cover all the expenses of an accident. Therefore, if someone is legally responsible for damages related to an accident, they will not receive any payment if they do not have coverage or will receive less than necessary to cover the cost of damages if their damages exceed the amount of coverage.
This is the kind of situation where protection against uninsured and underinsured motorists would help with expenses. Except New Hampshire and Virginia, all states require licensed drivers to maintain liability coverage. Why? Because it helps protect other people on the road. If you cause an accident, your liability coverage applies to pay for injuries and damages you cause to another person, up to the limits of your policy. Collision coverage is optional in all 50 states.
However, if you have a car loan or lease, your lender or leasing company will likely require it. Another factor to consider is the cost of your vehicle. For example, if you can't afford to repair or replace it, maintaining collision coverage can help you get back on the road if it gets damaged in an accident. And if you live in an area with frequent severe weather conditions or high rates of theft and vandalism, having comprehensive coverage will help protect you. Different types of insurance cover different types of expenses. Some types may cover vehicle damage.
But the type that is triggered depends on the cause of the damage. If you're in an accident and another driver is at fault, your property damage liability coverage should cover repairs to your vehicle. But if you're at fault, your collision coverage will usually pay for damage to your car. Comprehensive will pay for repairs if something other than a collision damages your vehicle, such as bad weather, animals or falling an object. Liability coverage is required in most U.
S. UU. as a legal requirement to drive a car. Liability insurance can help cover damage for injuries and property damage to third parties for whom you are legally liable as a result of a covered accident.
Bodily injury liability insurance is designed to pay for someone else's medical expenses if you injure them in an accident in which you are deemed to be at fault. This coverage may apply to you and anyone else listed as a driver on your policy. Comprehensive insurance helps pay for physical damage to the vehicle or replace it when the damage is not the result of a collision. Could be damage due to theft, wind, hail, or falling objects such as a branch or tree.
Damages that occur if you hit an animal are also covered by comprehensive insurance. For more information, check out WalletHub's guides on different types of car insurance, how to get car insurance quotes, and best car insurance companies in general. With rental vehicle reimbursement, the insurer pays the cost of a rented vehicle if your vehicle needs to be repaired due to a covered loss. For example, if you have a classic or vintage car, you may need an insurance policy that takes into account its age, value and how often it's driven.
Uninsured motorist insurance can protect you and your car against uninsured drivers and hit-and-run accidents. Collision insurance can cover damage to your car after an accident involving another vehicle and can help repair or replace a covered vehicle. On the other hand, if you have a more expensive car or one that is relatively new, collision insurance can help you get back to where you were before any damage occurred to your car. Underinsured motorist coverage is a type of auto insurance that applies when the policyholder is in an accident caused by a driver who does not have sufficient liability insurance.
