If you own a car, you should have an auto insurance policy. This will protect you financially in case of accidents, bodily injury and liability. If you cause an accident, your insurance policy will pay for any expenses. But what happens if you get in an accident? How will you pay for damages? What if you are sued for a lawsuit? Do you have a good insurance plan? If not, you need to consider purchasing one.
The minimum amount of insurance required by state law is known as liability coverage. It pays out if you cause an accident, and is liable for damages to the other person or property. Liability coverage also pays for your legal defense in case of an accident. In addition, it is important to know that most states will require you to have at least liability coverage in place. Some states also require you to have uninsured/underinsured motorist coverage. If you have an older car, you may want to consider buying liability coverage instead.
Another important consideration is coverage limits. A minimum liability limit may not cover the costs of a major accident, so it is important to consider a higher limit. Collision coverage is an option in all 50 states, but lenders may require you to purchase it. Depending on your state’s laws, you may also want to consider a deductible for your auto insurance policy. This coverage will protect you in case you’re in an accident and the other driver does not have enough insurance.
In addition to deductibles, you should also consider how many miles you drive. If you drive less than three miles a day, a $500 collision deductible will reduce your settlement by $1500. Make sure you save up money for the deductible if you plan to use the car less than four times a week. Consider getting a pay-per-mile auto insurance policy if you drive a small amount of miles. This will also save you money in the long run.
Comprehensive coverage also covers losses not caused by a collision. It may pay for repairs or replacement of your car. Comprehensive insurance will also pay for damages to other people’s property. Comprehensive coverage may even be required by a lender if you plan to lease your vehicle. You should also consider buying comprehensive coverage if you don’t have adequate funds for repairs. You may even be able to claim a refund if the other driver doesn’t have insurance.
Collision coverage is another important part of auto insurance. It pays for damages to other cars and other stationary objects in case of an accident. If you get into a car accident, you can usually make use of this coverage. Collision coverage is optional in many states, but if you have financed the car, it may be required. However, if you’re at fault, you should get collision coverage. Otherwise, your insurance will not cover the repairs.