What Type of Car Insurance Coverage Do I Need?
Auto insurance policies include many different components, some of which are optional. The specific car insurance policy you purchase will depend on your financial situation and the vehicle you drive.
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Bodily Injury Liability
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Most states require some amount of bodily liability injury, which will cover medical expenses of people injured in an accident for which you are at fault. It is wise to get more coverage than required if you have assets of any kind, which you could be sued for if your coverage is not enough.
Property Liability
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Property damage liability insurance is also required in most states. It will pay for damages to property such as cars and stationary objects. Again, the minimum requirement in most states is not enough to pay for damages to a luxury vehicle, so buying more coverage is wise.
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Comprehensive & Collision
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These car insurance coverages pay for repairs to your car when another driver is not at fault, after you pay a deductible. Most leases require comprehensive and collision coverage. It also is a good idea if your vehicle is still worth at least $5,000.
Uninsured Motorist
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If you have a poor health insurance plan, uninsured motorist and underinsured motorist coverage will be helpful in paying medical bills when the other driver's coverage is nonexistent or not enough.
Gap Insurance
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If your car is leased or financed, gap insurance will cover the difference between the amount you owe--if your car is totaled in an accident--and the amount the insurance company gives you as its current value.
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References
- Photo Credit Image by Flickr.com, courtesy of woodley wonderworks
