Auto insurance is designed to assist us when unexpected financial issues arise as a result of an accident or other auto-related problems. Most of us are not financially able to handle huge medical bills or expensive car repairs, so that’s where insurance comes in. Though you probably have car insurance, how can you know your options and the difference between them? Keep in mind that specific laws regarding insurance will vary from state to state, but here are some of the basics.
In almost every state, it is required that drivers carry liability insurance. This offers some protection if you were to cause an accident (in most states). Liability insurance should cover damages to the other person’s car or any property damage that you may have caused. The different forms of liability insurance usually include Bodily Injury and Property Damage.
Bodily Injury liability would help pay for medical bills incurred by the other driver, the passengers, or injured pedestrians. It should also cover funeral costs or pain and suffering losses. Property Damage liability would help cover repair bills or replacement of the other driver’s car and property. The state-mandated minimum coverage amounts can very greatly—but you may want to consider purchasing an amount over and above what the law requires. You could talk to your insurance provider to see if you should do some policy adjustments.
Uninsured Motorist Coverage
This insurance is designed to protect you from an uninsured driver, or underinsured driver who hits you and causes damage. So that you wouldn’t be held responsible for your own medical bills, your family’s medical bills, or car damages… your own insurance company should step up in the event that the person at fault can’t afford to pay you.
Personal Injury Protection
This is typically used in states with a “no fault” system in place. This means, that no matter who caused the accident, each person would turn to his own insurance company to cover the costs of medical bills and lost wages. This isn’t available in some states, but is also mandatory in others.
This type is designed to assist you if your car has damage resulting from anything other than a collision—such as hailstorms, fire, floods, vandalism, thievery and more. A newer, more expensive car may benefit the most form this type of coverage.
For each of these coverage options, and whatever other types you may be interested in, you should consult your insurance provider. Ask questions. Find out if you have enough coverage, or if you think you may be paying too much. Just like you can shop around for auto loans, you can also shop around for insurance providers… so don’t feel like you’re stuck with a policy that you aren’t happy with. And if you need help getting a car loan, give FederalAutoLoan.com a try. Fill out our free, no obligation application, and we’ll do our best to connect you to lenders and dealers who want to work with you towards car loan approval—regardless of your credit situation. Then, once you have your new or used car, remember your options for car insurance, and decide what’s best for you.