- A basic auto insurance policy might only include liability, covering just specific damages to the other driver, in case of an accident. If you have a loan on your vehicle, the lender will require additional coverage, listing them as the beneficiary. This would cover the amount of the loan. Another upgrade to an auto insurance policy would replace the car should it be lost due to theft or accident. Towing and roadside service are upgrades some insurance companies offer. This coverage will help pay for road side assistance or towing.
- Purchasing car insurance provides financial protection to you and your family. Should a member of your family be responsible for a car accident, inflicting damage or injuries to others, an adequate insurance policy may reduce the chances that the injured party will seek damages beyond what the insurance policy offers. If you don't have insurance, the victim will undoubtedly go after your personal assets and you could possibly be subject to criminal charges for failing to comply with state insurance requirements.
- When buying car insurance, you will normally be purchasing insurance specifically for the state in which your car is registered. Yet, this is not always the case. If your car is registered where you live, but your child is a college student attending school in another state, your insurance company may not require a policy for that state. If law requires you re-register your car in the college state, you may need to alter your policy.
- If your teenage child is driving your insured vehicle, yet is not on the policy, you probably won't be covered if there is an accident, leaving you personally liable for additional damages. Before allowing others to drive your vehicle, check with your insurance company to ensure you'll be covered in the event of an accident. Policies often have provisions covering the occasional driver. Some insurance companies require the other driver has a separate policy.
- When you already have an existing car insurance policy and you purchase a new vehicle, many companies have provisions that insure your vehicle within a specific time frame, giving you a few days to include your new car in your policy. Before purchasing a vehicle, verify your insurance company's policy, so you aren't driving an uninsured vehicle. While you may automatically have liability when driving the new car, the car itself may not be covered.
