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Car insurance is a legal requirement and you should not be driving if you do not have any. The problem with it comes to getting this insurance is the number of different policy options. If you are new to car insurance, you need to know about the different types and what they each offer you. Only then will you be able to make an informed decision about which insurance you should get.
Liability insurance is one of the most important types of car insurance on the market. This is also the insurance that most states require you to have in order to drive your vehicle. This insurance is also known as casualty insurance and will cover bodily injuries and damage to property.
Most states will have a minimum level for this insurance that you need to have. When looking at this insurance, you will need to check what the limit is and what your state requires. If the liability of an accident exceeds your insurance level, your personal assets will be used to cover the damages. It is possible to increase coverage levels by increasing the amount you pay each month.
Another type of car insurance that you need to consider is no-fault insurance and PIP. These insurance types are required under the law in 25 states. With this insurance, you will be able to make a claim against your own insurance policy for any injuries sustained. This is important because it negates the need to go to court and prove fault for an accident.
There are some states where PIP or Personal Injury Protection is compulsory. This insurance should be combined with no-fault insurance because PIP only covers bodily injury. Any damage done to your vehicle will not be covered and you will have to either claim this from the at-fault driver’s insurance or pay for it out of pocket.
Claiming against your PIP will result in a faster payout which can be helpful when injured. However, you may find that your right to sue for general damages is limited. This insurance may also duplicate cover offered by health and disability insurance.
PIP medical expenses insurance is a variation of the PIP insurance you can get with your no-fault insurance. The primary difference is that this insurance will cover the costs of medical expenses only. This is something to consider as it is one of the cheaper car insurance options.
Collision insurance will cover the damage caused to your vehicle when you are in an accident regardless of fault. This insurance will have an excess that you need to be aware of. The excess will affect the monthly payments as the higher this is the lower your premium will be. Your coverage will cover all the repairs to your vehicle or provide the cash value of the vehicle if it has to be written off.
Getting collision insurance will depend on the age of your vehicle. However, if you are buying a car on a loan, the lender will generally insist that you have this insurance coverage.
Uninsured Motorist Insurance
This is a form of car insurance that you should seriously consider getting. It will protect you if you are in an accident with an uninsured or underinsured motorist. While insurance is required in many states, there are some where the penalties are so low that people are willing to take the chance of driving while uninsured.
It is important to note that the definition of uninsured and underinsured drivers will vary depending on the state. There are some states that have an unsatisfied judgment fund which provides compensation when you are unable to collect damages from the uninsured driver. These payouts will generally not be more than the minimum liability limits set by the state.
A lot of people look at comprehensive insurance because they assume it is the best for their vehicle. This type of insurance will cover the loss and damage to your vehicle which is not the result of an accident. This will include theft, fire, falling objects, and collision with animals. Acts of Gods are also taken into account by some insurance companies, but this is not always the case.
Comprehensive insurance will have a lower excess when compared to collision insurance. It is possible to combine comprehensive and collision insurance into full coverage. However, this is not recommended as you could be left underinsured due to the different coverage amounts.
When looking at car insurance, you may be confused about which policy type you should get. It is recommended that you check the laws in your state first because certain insurance policies may be a legal requirement. If there are no requirements, you need to consider what you want to have covered such as collision or other damage and choose the policy that provides this.