When it comes to car insurance, the age-old question is, How much car insurance do I need? Should you just get the cheapest option? You need coverage that actually covers you, the kind that protects you from budget-busting car wrecks. For starters, most drivers should have at least three types of car insurance: liability , comprehensive and collision.
Yet one in eight Americans drives without some kind of auto insurance in place. Let an independent auto insurance agent find you the best deal. We get you quotes from all the providers. Get the right coverage at the right price! Another reason to get car insurance is because it protects your finances and assets. How else are you going to cover the costs after your teenager accidentally drives your SUV through the garage door?
The right amount of car insurance can really save your financial skin. More on the average costs later. The deductible is what you have to pay before your insurance company will pay their share. A premium is what you pay for your coverage usually monthly.
Your coverage limit is the maximum amount your policy will pay for each type of coverage. Now, there are a bunch of different types of car insurance. The most important ones are liability , comprehensive and collision coverage. If you have all three, it means you have full coverage. Liability insurance covers costs like medical or repair costs for other people if you cause an accident. Every U. But those state minimums are not nearly enough to protect you.
Comprehensive coverage protects you from things like theft or damage from a fire, a storm, a natural disaster or even a tree branch falling on your car. So, do you need collision? The only time you might not need collision is if your car is paid off and, again, you could replace it from your savings. Depending on where you live, MedPay is a requirement.
Personal injury protection PIP is similar to MedPay but has more extensive coverage, higher coverage limits and a higher premium. Here are some things PIP may cover for you:. Though it varies from state to state, PIP usually offers immediate coverage up to the limit set by your auto insurance and would need to be used up before you have to tap into MedPay or your own health insurance policy.
Other coverages, like gap coverage or windshield coverage, may also be requirements by your lender to make sure you are protecting their investment. There are a lot of ways your car can be damaged, so making sure you have protection against any potential loss is a smart decision. You can also use MoneyGeek's car insurance calculator to get a more specific estimate based on your age, vehicle and driving history.
Having higher levels of insurance is an important part of protecting yourself financially. Although New Hampshire does not require auto liability insurance, drivers in this state need to show financial responsibility to cover accident expenses and purchasing insurance, which may include UM coverage. Thirteen states require personal injury protection PIP coverage. Gap insurance typically covers the difference between the value of your car and the balance of your car loan if your vehicle is totaled.
Your deductible is the amount you pay out-of-pocket towards claims for your vehicle. The good news is there is no deductible on your liability coverage, but for your comprehensive and collision policies, insurance companies will ask you to choose a deductible level.
There are some instances where only carrying liability coverage makes sense. Drivers who can afford to replace their car out-of-pocket may not want to spend the extra money on full coverage car insurance. If you have a new car, luxury car or an expensive vehicle, you might want to carry collision and comprehensive coverage as well. If you have a loan on your vehicle, you can carry gap coverage as well. Each state has different rules and regulations regarding insurance requirements.
Some states have much higher minimum coverage levels than others, and sometimes even require you to carry additional coverages such as personal injury protection PIP and uninsured motorist coverage UM.
Car Insurance Guide for the Savvy Consumer. Liability Car Insurance. Rachael Brennan is a professional freelance writer.
She has been published on a number of websites, including Adweek, Glamour, and Cracked. For example, say you hit another car, total it and seriously injure four people. Can your liability insurance pay for them? The people you injured can sue you for that money, and you could end up losing your home or, in some states, having your wages garnished.
The more you have to lose, the more they can come after. In general, umbrella policies cover those who have a lot of assets or more opportunities to encounter risk. If you host lots of parties, have an easily accessible pool, keep a bunch of dogs or have rental properties, you might have the sort of risk an umbrella policy is meant to cover. Non-owner insurance is auto liability coverage only, and is appropriate only if the cars you typically borrow or rent belong to someone outside your household.
If an insurer finds out you live with a customer, they may have already added you. This could include injuries to other drivers and their passengers, and damage to other vehicles or civic property. If someone else is to blame for an accident that damages your car, their liability insurance would typically pay for your repairs. Learn more about the average car insurance costs.
It depends. ZIP Code. What is liability car insurance? Bodily injury liability coverage. Property damage liability coverage. Liability car insurance limits. Split liability limits. Combined single limit liability.
Do you need liability car insurance? State minimum liability insurance requirements. Click to see your state's required minimum coverage. How much liability insurance do you need? Need more liability insurance? Grab an umbrella. Frequently asked questions What does liability car insurance cover?
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