Good car insurance goes further than simply safeguarding your auto from damage as it can also ensure your financial future should you ever be found liable for an accident. Just about all states mandate that drivers carry a certain level of liability coverage, however additional forms of coverage can deliver terrific protection from such things as property damage, vandalism and theft, weather events, and so much more.
Types of Coverage: There is a myriad of coverage types available with auto insurance. Some usual forms of coverage include the following:
Liability- This is the kind of coverage that is often mandated by state law, which protects you in an accident should you be found at fault. This kind of protection compensates the policyholder for the repair or replacement of a car that you damage and other property damage. This also covers the expense of medical bills of others involved.
Collision- This kind of coverage pays out for damage (or replacement) of your vehicle, regardless of fault. Collision coverage is especially important for new cars and is often mandated if one takes out a loan in purchasing said vehicle.
Comprehensive- This type of coverage pays out for damage outside of that caused by a collision, such as severe weather events, vandalism, theft or should the car be struck by an object or animal.
Uninsured/Underinsured Motorist- Many in the know have suggested that almost 15% of those on the road drive without necessary liability coverage. This means that if you are not at fault but unfortunate enough to be involved in an accident with an uninsured or underinsured driver, you are highly vulnerable to financial loss. This is the kind of coverage that keeps you safe from those who would drive without insurance.
There are other coverage types available, all of which can be added to an overall policy package. Though less well known, these types of coverage can be very helpful:
Personal Injury Protection– Known as “PIP”, this coverage compensates the policyholder for medical costs incurred by you and your passengers, no matter who’s at fault.
Gap Coverage– This pays off your car loan balance if it is totaled.
Rental Reimbursement- This pays out for the expense of a rental car if your car is being replaced or repaired due to a covered issue, such as an accident.
Paying the Deductible
When shopping for a good auto insurance policy, there are two big issues to consider that contribute most in determining your premium. First is the extent and level of coverage chosen and, finally, your deductible amount. The deductible is how much the policyholder must first pay, out-of-pocket, prior to repair or replacement being conducted for your damaged vehicle. For example, if you initiate a claim for $1,500 in damages and you have a $500 deductible, then you pay the 500 dollars first and the insurance company then will cover the balance of $1,000. Generally, the higher the deductible the lower the premium. Keep in mind that deductibles are normally only paid when one is found to be at fault.