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By Tim Maxwell
September 13, 2022 / 8:38 AM / CBS News
Auto insurance protects your assets if you’re in an accident. Still, insurance is a complex product that may leave you with many questions. For example, how much should you spend on car insurance? What types of coverage should you get?
The average driver spends approximately $1,000 per year on car insurance. You may spend more or less than that amount. Bear in mind, that your state may require you to purchase certain mandatory coverages.
If you’re in the market for auto insurance, or simply want to see what other options you have, it’s easy to get started. View rates, get a free quote and start saving money.
To make the most informed decision, it’s helpful to understand what types of coverage are available to you and why it’s important to have.
Choosing car insurance that’s right for you is all about finding the best combination of price and coverage. Ideally, you should aim for sufficient coverage to suit your needs at the lowest price.
Compare quotes from multiple insurance providers to determine the best price. Just make sure you use the same types of coverages, minimums, deductibles and other policy parameters when you’re getting quotes, so you’re comparing apples to apples.
Not sure what insurance coverages you need? There are countless options, and working with an agent to determine your needs is usually a wise idea. To help you get started, here are six major types of car insurance coverage to consider.
As its name implies, liability insurance pays for covered damages and injuries when you are held responsible for an accident. As mentioned earlier, most states require you to carry auto liability coverage.
There are two types of liability coverage:
The purpose of comprehensive auto insurance is to cover many types of losses that don’t stem from an auto accident. For example, your comprehensive coverage may pay for damage to your vehicle from covered events, which typically include:
Generally, comprehensive coverage comes with a deductible (the amount you must pay out of pocket before your insurance coverage kicks in).
If you want to learn more about this particular type of coverage, reach out to an insurer today. They can provide information on costs, deductibles, coverage and more.
Unlike liability insurance, which covers damages to the other party, collision coverage may pay for damages to your vehicle. Whether you hit another vehicle or object, collision coverage may cover the costs to repair or replace your car after you pay your deductible.
Collision coverage is usually optional, but if you’re financing your vehicle, your lender or leaseholder may require you to carry it.
UMC coverage is effectively a liability policy to protect yourself against drivers who drive uninsured or don’t have enough liability coverage to cover your medical expenses. In some states, your UMC coverage may also help pay for damages to your vehicle.
Depending on your state, uninsured and underinsured motorist coverage may be required or optional.
Medical payments coverage may help pay for medical treatment of injuries you or your passengers suffer from an accident. Covered treatments may include doctor visits, surgery, x-rays, ambulance transportation, emergency medical technician and other services.
Medical payment has a per-person limit, meaning you’ll have to pay out-of-pocket expenses beyond your insurer’s limit.
Like medical payments coverage, personal insurance protection may cover your medical costs from an accident. However, unlike MPC, personal injury protection may pay for lost wages, child care or other expenses brought about by your accident-related injuries.
Also known as PIP or no-fault insurance, personal injury protection may pay for medical expenses regardless of who is liable for an accident. It even covers you if no other parties are involved in an accident.
When you pay your auto insurance bill, it’s for a benefit you hope you never take advantage of. Nevertheless, car insurance is a valuable and necessary tool you should have if you drive a car, whether it’s to satisfy state law, your loan requirements, or your own liability protection needs.
If you’re at fault in a car accident, how would you pay for specific losses like damage to the other party’s vehicle or medical bills? How would you pay for your legal defense if the other party sues you for the accident?
Simply put, it’s necessary to have car insurance if you drive a car to help you pay for covered losses and protect you legally and financially. Other reasons to purchase auto insurance include:
Have more questions? Or simply want to get a new quote to compare to your existing policy? Contact an insurer today and start saving money.
First published on September 13, 2022 / 8:38 AM
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