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What if you get the wrong car insurance and don’t find out until it’s too late?
There are many different types of car insurance, and it’s easy for new drivers and veterans alike to pick the wrong kind. That’s why it’s important to figure out which insurance best suits your specific needs. Once you’ve determined the policy you require use Safeco discounts to save while getting the car insurance needed.
We’ve put together a thorough guide to the different types of auto insurance. Keep reading to get started!
It’s important to understand how liability works with car insurance. There are two different kinds of liability coverage: bodily injury and property damage.
As the name implies, “bodily injury” covers injuries for those you harm in an accident. This may include medical expenses, loss of income, pain and suffering, and even funeral expenses.
Property damage, meanwhile, covers damage to other vehicles as well as other property that might get damaged. While you can choose different levels of coverage, keep in mind that liability insurance is mandatory in most states.
Collision is another important aspect of car insurance. This covers damage to your car, whether you hit another object or someone else hit you.
Unlike liability insurance, collision is completely optional in all states. Generally speaking, you should consider this insurance if your car is under ten years old or worth over three thousand dollars.
A simpler way to figure out if you need collision insurance is to ask if you could afford to replace a totaled car. If the answer is “no,” then you need the insurance!
Comprehensive auto insurance is very thorough, and is optional at the state level. However, certain junk automobile loans may require this level of insurance.
This insurance covers all manner of damage to your car, including vandalism, weather, animals, and theft. Generally speaking, the criteria for comprehensive insurance is similar to collision insurance. It’s worth it for cars that are newer or otherwise too expensive to replace.
You may sometimes hear about “full coverage” insurance. This is a shorthand term for a combination of collision insurance and comprehensive insurance.
Uninsured/Underinsured Motorist Coverage
This kind of insurance is optional in some states and mandatory in others. If you already have collision insurance, it’s not a necessity. If you don’t, though, this protects you in the event of a driver hitting you who cannot cover your damages.
If you are in an optional state, then it’s up to you to determine if you need this. Some food for thought, though: one in eight drivers doesn’t have insurance!
How to Pick the Right Coverage
Otherwise, the rule of thumb is that those with more assets should get more insurance. A young college student may have little to lose with basic coverage, for instance, while their parents could end up losing a home or other assets to pay the cost of an accident.
Types of Car Insurance: The Bottom Line
You know now how to pick the best types of car insurance. However, do you know how to stay on top of things when you’re on the road?
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