Just purchasing an auto is not enough. Driving calls for due diligence. Car insurance is a downright requirement for any car driver. In fact, in some countries, it is a legal requisite before you can hit the road. The potential expenses involved in an accident, whether repair or replacement charges of the property or car or medical bills of the victims, these are simply quite enormous to run the risk of driving without adequate insurance cover.
When you consider all these risk factors, you clearly understand that insurance is an absolute necessity. There is a wide array of options available when you think about insurance. While it may seem prudent to choose the cheapest insurance coverage, the outcome can transform into a false cost-cutting measure.
Types of Car Insurance Policies
- Liability Insurance – Liability insurance is the minimum prerequisite mandated by every state. This policy covers any kind of damages to the car or property after an accident. Additionally, the policy covers all medical bills of the accident victims nursing various injuries. You can go past the minimum requirement if you have the financial clout to meet the payments. Remember, the more assets you need to protect, the more liability insurance you could do with.
- Comprehensive Insurance – The best thing about having a comprehensive insurance policy is that your insurer will take care of anything that crops up. Remember that both liability and collision insurance only cater for auto accidents. But with comprehensive insurance cover, any situation that confronts your car, be it natural calamities, burglary, vandalism or animal collision, all are resolved by the insurance company. This type of insurance is a bit expensive and you can at least lower the cost of this cover if you install anti-theft or tracking devices in your car.
- Collision Insurance – This type of insurance makes your insurer cater for the repairs of your car after an accident. In case, your car is damaged beyond repair, the coverage policy will compensate you for the total value of your vehicle. The payout rendered equals the value of your car prior to the accident. Collision insurance is not obligatory. It is ideal when you have a brand new car.
- Bodily Injury Liability – If you are the main culprit in an accident that led in injury to another person, bodily injury liability policy becomes active. This coverage covers all medical costs, rehabilitation, lost earnings, legal representation for the aggrieved party, funeral expenses and pay out for emotional stress.
- Uninsured Driver Protection – Despite the law mandating every driver to have an insurance policy, some drivers do not heed to this call. You wouldn’t want to pay high medical bills after being involved in accident due to the negligence of an uninsured motorist. The idea behind the uninsured driver protection covers for any damages caused by a driver who has no insurance.
- Underinsured Driver Protection – Also referred to as underinsured motorist coverage. This policy protects you in case you sustain injuries or your car gets damaged due to the fault of a driver who has the minimum legal requirement of liability insurance, but no adequate coverage to pay out your total losses. This coverage comes to play when the fault lies squarely with the other underinsured motorist. UIM covers your medical bills, property damage and lost income.
- Gap Insurance – If you bought your car through a loan and are still paying, gap insurance is certainly a good option. It is ideal for motorists who still owe car loans and need to settle the car payments if it gets involved in a road mishap.
- Personal-Injury Protection – A road mishap may result in the driver as well as the passengers sustaining severe injuries. The costs involved with treating serious accident injuries are very exorbitant. Personal injury insurance covers any medical costs incurred by the motorist and the passengers caught up in the road mishap. Irrespective of whose fault it is, this insurance policy covers all the medical expenses of the people involved.
- No-Fault Insurance – This insurance option covers wounds and any damages to property, regardless of whose fault it is that the accident occurred. This insurance is not obligatory and its decision relies to a great extent on the type of insurance alternatives available to you and their prices. Go for a no-fault policy if you own a very expensive car.
Rental Car Insurance – This type of coverage covers you when involved in an accident when driving a rental auto.
In conclusion, adding these insurances to your policy will increase your premium. Based on the scenarios you come across, having good coverage will save you lots of stress and financial woes.