Liability insurance covers costs like medical or repair costs for other people if you cause an accident. Every U. But those state minimums are not nearly enough to protect you. Comprehensive coverage protects you from things like theft or damage from a fire, a storm, a natural disaster or even a tree branch falling on your car.
So, do you need collision? The only time you might not need collision is if your car is paid off and, again, you could replace it from your savings. Depending on where you live, MedPay is a requirement. Personal injury protection PIP is similar to MedPay but has more extensive coverage, higher coverage limits and a higher premium. Here are some things PIP may cover for you:. Though it varies from state to state, PIP usually offers immediate coverage up to the limit set by your auto insurance and would need to be used up before you have to tap into MedPay or your own health insurance policy.
With the cost of new cars continuing to climb, the average length of a car loan has expanded to six years or more, making GAP insurance more popular than ever. Our recommended auto insurance coverage? Skip GAP insurance and save yourself a financial headache by buying a used car with cash in the first place. If you already have a car loan, make it your goal to pay it off as quickly as possible so you can drop the GAP coverage and lower your premium. Temporary car insurance is another type of coverage you should know about.
Instead, it comes in the form of non-owner car insurance or rental car insurance. Our advice? Save your money and skip this coverage. So, how exactly do you make do without a car after an accident? It covers the cost of a rental car up to a specific dollar amount and number of days while your car is in the shop. If your car tends to sit in the garage collecting dust, you may be interested in pay-per-mile coverage.
Gap insurance typically covers the difference between the value of your car and the balance of your car loan if your vehicle is totaled. Your deductible is the amount you pay out-of-pocket towards claims for your vehicle.
The good news is there is no deductible on your liability coverage, but for your comprehensive and collision policies, insurance companies will ask you to choose a deductible level. There are some instances where only carrying liability coverage makes sense. Drivers who can afford to replace their car out-of-pocket may not want to spend the extra money on full coverage car insurance. If you have a new car, luxury car or an expensive vehicle, you might want to carry collision and comprehensive coverage as well.
If you have a loan on your vehicle, you can carry gap coverage as well. Each state has different rules and regulations regarding insurance requirements. Some states have much higher minimum coverage levels than others, and sometimes even require you to carry additional coverages such as personal injury protection PIP and uninsured motorist coverage UM.
Car Insurance Guide for the Savvy Consumer. Liability Car Insurance. Rachael Brennan is a professional freelance writer. She has been published on a number of websites, including Adweek, Glamour, and Cracked. You can follow her on Twitter rachaelbwriter.
If the claims against you are worth more than the coverage you have purchased, the victim s can sell your home or other assets. They can garnish your wages. They can force you into bankruptcy. That amount used to be enough for most people, but unfortunately that is no longer the case.
One important reason for this is the recent reduction in available accident benefits. Your TPL is meant to cover any damages and losses that haven't already been paid to the victim by other available insurance, including accident benefits. What that means in practical terms is that those who make a mistake and cause an accident are now potentially on the hook for way more damages than they were when the benefits were at higher levels.
Further, the added benefit is that you then have the higher limit for your Family Protection Endorsement. By purchasing this extra coverage, you actually protect your family twice. If you're on a tight budget, you may be tempted to pay less per month in order to maintain the bare minimum required by law. But this could cost you greatly if you're ever in a serious accident. If at all possible, consider spending the few extra dollars that will protect you properly.
Rather than focusing on the small difference in the cost of your insurance premium, think about the value of this extra protection and what it could be worth to you and your loved ones.
How much is peace of mind worth to you? Mistakes do happen, and we urge you to protect yourself and your family. Hopefully you will never be involved in an accident. Hopefully you will never have a lawsuit filed against you for causing an injury to someone else.
Hopefully you and your family will never sustain serious injuries in a car accident. But if, by chance, you are faced with this unfortunate event, you'll be glad you paid a little more in insurance premiums to protect yourself with this necessary extra coverage. The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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Learn More Accept. To print this article, all you need is to be registered or login on Mondaq. Personal injury protection PIP covers medical bills for you and your passengers no matter who caused the car accident. How much PIP insurance should I buy? PIP rules vary by state where it is offered. For example, for Florida car insurance , PIP options range from basic to extended:. If PIP is optional in your state, you can choose to decline it if you have a good health insurance plan.
MedPay is required in some states. How much MedPay should I buy? But you might need a few additional coverage types to fill in some gaps. Here are some to consider. You can get free quotes online or by calling an independent agent in your area. Make sure you ask about car insurance discounts. Insurance companies offer many types of discounts to attract customers—everything from good driver discounts, car safety discounts, multi-policy discounts, and even discounts for paying in full or going paperless.
The best car insurance companies pair competitive prices with good customer service. If you get into a car accident, you want to be sure your insurance company will make the insurance claim process go as smoothly as possible. Jason Metz is a writer who has worked in the insurance industry since He has a B. Select Region. United States. United Kingdom.
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