When it comes to protecting your vehicle, you need to make sure you have the right car insurance coverage. At a minimum, you must purchase your state's minimum car insurance requirements. However, these requirements are often inadequate and won't cover repair bills for your own car. If you want better coverage, you'll have to buy more than the minimum requirements.
Most states require certain types of car insurance, such as liability insurance, uninsured motorist insurance, personal injury protection, or MedPay. In addition, if you have a loan or lease for your car, your lender may require you to have collision and all-risk insurance. All states, except New Hampshire and Virginia, require drivers to have liability coverage. Collision coverage is usually required if you have a car loan or lease.
If you're involved in an accident, collision coverage will help pay for repairs to your vehicle. The insurance company will reimburse you up to the current market value of your vehicle, minus your deductible. Comprehensive coverage covers certain types of damage not caused by an accident, such as inclement weather, falling objects, vandalism, theft, rodent damage and more. If a covered event damages your car, the insurance company will reimburse you up to the actual cash value of your car, minus your deductible.
Lenders and leasing companies often require comprehensive coverage if you have an auto loan or lease. Liability coverage helps pay for other people's injuries. However, personal injury protection (PIP) can help pay for your injuries and those of your passengers after an accident. PIP is available in no-fault states, meaning that insurers pay for their policyholder's injuries regardless of who is at fault for the accident. You may have heard the term “full coverage insurance” but technically there's no such thing because no coverage or combination of coverages can protect you 100% of the time. When people use the term “full coverage” they are generally referring to a combination of liability coverage and property damage coverage (i.e., collision and comprehensive).
Some states require PIP as part of their “no-fault” car insurance laws, while in other states you can purchase PIP as an optional type of coverage. Insurance companies also often offer optional coverage options such as car rental coverage, gap insurance and roadside assistance. So even though liability and full coverage are the two main types of car insurance policies there are still several specific types of car insurance that drivers can purchase. It depends on the value of your vehicle, how much you can pay to repair it and the risk you're willing to take. If your car is worth more than you would pay for the premium and deductible it's probably worth considering. Insurance companies offer many types of discounts to attract customers from discounts for good drivers, discounts for car safety, discounts for multiple policies and even discounts for paying in full or stopping using paper. Having adequate car insurance coverage can help protect you from financial loss after an accident or other covered damage.
Generally, you'll be able to rent a car for a maximum amount in dollars and the insurance company will reimburse you for the cost of the car. Insurance for uninsured drivers (UM) and for underinsured motorists (UIM) pays your medical bills if someone bumps into you and you don't have liability insurance or not enough.
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