What You Need to Know About Car Insurance

Car Insurance protects you from damages that can happen while you’re driving, such as an accident. It can also help cover legal costs if you’re sued.

You can get quotes online or by calling an independent agent. Compare rates, coverage options and deductibles before choosing a policy.

Liability Coverage

Liability coverage protects you if you cause an accident that injures another person or damages their property. It also helps protect your assets and wages from seizure and lawsuits.

Each state sets a minimum amount of liability coverage for drivers to carry, but it’s usually wise to buy more than what’s required to help cover high medical bills and vehicle repair costs later on.

Most states require liability insurance of at least $25,000 per injured person, $50,000 for injuries to multiple people and $10,000 for property damage.

Some insurers offer a combined single limit auto liability policy, which is one larger liability limit that covers both bodily injury and property damage.

This type of coverage is often more expensive than liability-only or collision and comprehensive coverages, but it may be worth the extra cost if your financial situation would be in jeopardy should you get into an accident without this protection.

Collision Coverage

Collision coverage helps pay for repairs to your car if it’s damaged in a collision. It’s an optional coverage, but many lenders require it if you lease or finance your car.

The cost of this insurance typically depends on several factors, including your driving history and the type of vehicle you drive. It’s also important to consider your deductible.

A collision deductible is a set amount you choose to pay out-of-pocket before your insurance company pays on a claim. This is a great way to reduce your premiums and save money on out-of-pocket costs, so be sure to choose one you can afford.

This coverage also covers damage to your car if you hit a fixed object or another driver who doesn’t have enough insurance to cover the full amount of your repair costs. It can be especially helpful if you drive an expensive car or if you don’t have enough cash on hand to cover a large repair bill after a crash.

Comprehensive Coverage

Comprehensive coverage, also called other than collision coverage, pays for damage to your vehicle caused by something other than a car accident. This could include things like fire, theft, vandalism, windstorm or flooding.

This coverage can be very helpful, especially if you live in an area with high theft and weather-related risk. This can include cities or towns with higher crime rates and a greater chance of tornadoes, hurricanes, floods or earthquakes.

Generally, comprehensive insurance has a deductible you’re responsible for paying before the insurer starts to cover damages. This deductible can be as low as $1,000, but it’s important to understand how much you can afford to pay out of pocket before the coverage starts to kick in.

The cost of comprehensive coverage depends on the age and value of your vehicle, as well as where you live. You’ll also need to consider your budget, the amount of protection you want and how much money is available to pay for unexpected repairs or the purchase of a new car in the event that your car can’t be repaired.

Uninsured Motorist Coverage

Uninsured motorist coverage protects you against accidents caused by drivers who don’t have insurance. It’s available in most states and is typically not expensive to add to your car insurance policy.

Some states require it, and it’s a good idea to carry it if you live in a state with a high rate of uninsured drivers.

It can cover your medical bills, up to your limits. You can also get coverage for property damage.

In some states, it can be combined with underinsured motorist coverage. This type of coverage pays for damages if the at-fault driver’s policy only covers up to their policy limits, but yours covers more.

You can also buy UM and UIM in a bundle, known as SUM, which can be useful for those with higher deductibles or out-of-pocket maximums. It’s best to compare personalized rates for uninsured motorist coverage, especially if you live in a state with more drivers who don’t have insurance.

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