When purchasing a car insurance policy, you will need to decide exactly what type of coverage you want this policy to include. Choosing a policy that does not provide enough coverage could leave you covering repair bills out of your own pocket while choosing a policy with too much coverage could leave you paying unnecessarily high premiums each month. That is why it is important to understand all the different coverage options that are available and how they apply to your specific needs.
Your Liability Coverage
All car insurance policies will include a minimal amount of liability coverage. This coverage is required by law and cannot be removed from your policy. However, you can choose to increase the amount of liability coverage your policy offers. Liability coverage protects you from being held personally liable for the repair or medical bills of another driver if you cause an accident that results in property damage or bodily injury. While the law only requires a minimal amount of coverage, you may find that these limits are not enough to cover the costs associated with a major accident. Consequently, it may be in your best interest to choose slightly higher coverage limits.
Your Comprehensive And Collision Coverage
Comprehensive and collision coverage is referred to by many people as full coverage. Full coverage is not required by law but is required by many lenders if you have an active auto loan. This coverage provides protection to help pay for repairs to your vehicle if you cause an accident. This coverage will also offer protection if your vehicle is damaged as a result of severe weather or theft. This coverage maxes out at the resale value of your vehicle. What this means is that the policy will never pay more than your vehicle is worth. Consequently, this type of coverage is most beneficial to people with more valuable cars. If your vehicle does not have much resale value, you could find that you pay more in insurance premiums than it would cost you to replace the vehicle on your own without any coverage.
Your Uninsured Motorist Coverage
Whether or not you are required to carry uninsured motorist coverage will depend on where you live. This is because while some states do currently require this coverage, the coverage does remain optional in many jurisdictions. Even if you are not required to carry this coverage, you may want to seriously consider adding it to your policy. This is because uninsured motorist coverage protects you if you are ever hit by a driver who does not have liability coverage as required by law.
For more information on car insurance, talk to an insurance provider.
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