Basic Auto Insurance Facts You Need To Be Aware Of

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A minimal amount of auto insurance is mandatory in every state. But there are other reasons why you should be sure that you are adequately covered, for your own sake as well as your family's. Knowing the different terms and purposes for each type of coverage will help you make better decisions when you buy your insurance.

Protect Others as Well as Yourself

First, of course, you need liability. This is the only type of insurance that is required by law and also the most important coverage you can get. Liability pays for bodily injury when people are hurt or killed in an accident that is your fault. It also replaces the other driver's car, other types of property damage like fences or utility poles and pays your legal costs if the case goes to court. Of course, when your expenses reach the limit of your coverage you'll have to pick up the tab so it's best to get as much liability coverage as you can afford.

If you have a new car or one with a high blue book value, you'll probably want collision coverage that till replace your car if it's totaled. If you have a loan on your car the finance company will require this type of insurance.

What if your car is damaged through vandalism, its windshield broken or is damaged by wind, hail or other natural elements? If a tree falls on your car, will your homeowner's insurance replace it? This is where comprehensive insurance kicks in and compensates you for your losses. If you have an older car you might want to forego this type but the more your car is worth, the more you need it.

Dealing with Uninsured Drivers

No matter how strict our laws are people find ways to circumvent them. This is where uninsured and underinsured motorist insurance can be a lifesaver. It's not crucial in states that have a no fault policy where each driver's insurance takes care of their damages but in most states it's a very important aspect of your car insurance. It can make the difference between a stressful and costly recovery and a smooth one. It will take care of lost wages, medical expenses, your passengers' injuries, etc.

Other Coverage You'll Want

Everything mentioned so far is coverage you must or should have. There are other types of coverage that are entirely optional but you'll be very glad to have them if you should need them! For instance, towing and roadside assistance can literally be a lifesaver if you should have a flat on a busy freeway or break down in the middle of a lonely road in the middle of the night. Rental reimbursement comes in handy if your car is in the shop because of a collision and you have no other way to get around. Gap coverage pays the difference between the amount you owe on your car loan or lease and the actual cash value of the car.

You would be wise to err on the side of caution and have as much liability coverage as possible. A higher deductible and taking advantage of discounts for good drivers, etc., will help you save money on your coverage.
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