Shopping for insurance of any kind can be a confusing and intimidating experience. This is especially true when shopping for auto insurance. There are a wide ranges of motor insurance options for car buyers and it seems like more and more options are added every year. By understanding what options are available to you, it will be easier to get all of the coverage that you want, while making sure that you are not paying for things that you do not need. There are 3 basic types of motor insurance options for car buyers to choose from.
The first type of insurance is considered to be minimum by every state. This is known as liability insurance. Essentially, this insurance covers other people’s injuries. It does not cover you or your vehicles. This type of insurance is has been made mandatory to have because the state wants the other drives to be covered in case you cause them or their vehicle harm, whether intentional or not. This type of coverage has strict limits (maximum amounts) that will be paid per person/incident. One thing to keep in mind with liability insurance is that if you set your limits too low, you can put yourself at risk financially because the insurance company will only cover up to a certain amount, and you will have to pay the rest.
The next type of insurance is property damage liability. This insurance cover you in case your car damages the property of someone else. Essentially this type of insurance works the same way that liability insurance works, however it is designed to cover you and your property in the event that your car causes damage to someone else’s property. Just like liability insurance, if you set your limits too low, you can be putting yourself at a financial risk.
The third type of insurance is physical damage coverage, or as it is more well known, Comp and Coll. This type of insurance is designed to cover your vehicle and any other vehicle that you are driving. It covers losses that occur from a variety of incident other than a direct collision. When choosing physical damage coverage, it is important to keep in mind that the higher the deductible, the lower your premium. However, it also means that you will need to pay more towards the bill before your insurance will kick in.
There are a number of additional motor insurance options for car buyers that are common including: uninsured and under-insured motorist coverage, personal injury protection, first party medical benefits, lease gap insurance, work loss, rental car reimbursement, and many more. Even with all of these choices, the 3 most common motor insurance options for car buyers are liability, property damage liability, and physical damage coverage. If you are not paying for your new used car outright, then there is a good chance that your lending institution will require “full coverage”. This can mean a lot of different things, however it will normally mean that you will need to get full comp and coll. Depending on your lending institution, it could also mean that you require additional coverage, such as uninsured and under-insured motorist insurance, as well.