Understanding Your Auto Insurance Options And Coverage
Auto insurance is required to drive your car on public streets and roads in most US states. The insurance you buy for your car protects other drivers and property owners, but it also protects you. Driving without insurance is a gamble that could leave you in extremely bad shape financially.
Minimum Requirements
Every state in the US has its own limits and requirements, so it is essential to check with your state for guidance, but most states require you to have car liability insurance on your car when operating it on public roads. The liability insurance covers other vehicles or property that you hit with your vehicle if you have an accident.
Liability insurance can cover things like fences, mailboxes, or even a house or storefront if you lose control and hit one with your car. It is not limited to the damage you cause to another vehicle in an accident. The amount of insurance you need is often dictated by the state law, setting a minimum for the policy but allowing drivers to carry additional insurance if they feel they need it. Most drivers will carry the minimum coverage, but if you think you need more, talk to your insurance company about adding extra insurance to the policy.
Collision and Comprehensive Coverage
When you buy a new car or even a used one that you have a loan on, the loan company will want you to carry enough insurance on your new vehicle to guarantee the loan should you wreck the car or if it is damaged by someone else. The comprehensive coverage often covers damage that occurs due to someone else's negligence or if a tree falls on your car, for example.
Additional collision insurance will cover the car in the event of an accident that you are involved in with another vehicle. If the other driver does not have insurance or if you cause the accident, the collision insurance is intended to fix your car. Most loan companies require this so that the vehicle is still drivable, and you will continue to pay for it even after an accident.
Like liability insurance, most states have minimum coverage amounts for these types of insurance, but the loan company is ultimately the one who is going to enforce the coverage. If you let the coverage lapse, the insurance company will notify the loan company, and they will likely come and repossess your car because you are not meeting your loan terms.
For more information about auto insurance, contact a local insurance company.
