Buying car insurance is easy, thanks to the internet – -you can readily check out insurance policies online. But that still leaves a big question: with all the different options, what kind of car insurance do you need?
Every state requires liability insurance, although the minimum you’re required to carry varies by state. Liability insurance covers two kinds of liability: property damage and personal . That means that in a car accident, the insurance agency will pay for the damage to the other person’s car and their hospital bills if you’re found to be at fault.
Beyond liability insurance, there’s comprehensive and collision insurance. This is optional legally, but usually essential from a financial standpoint to protect your car. Collision insurance pays for repairs to or replacement of your car in the event of an accident. Comprehensive insurance covers other eventualities like hail, tornadoes, break-ins – whatever weird damage life throws at you. If your car is financed, the lender may well require you to carry comprehensive and collision insurance. That’s because it’s almost always a good idea.
One of the secrets of buying car insurance: buy lots of it. It isn’t usually much more expensive to purchase more coverage than the state minimums, but that also buys you peace of mind in an accident. Wouldn’t you rather spend a few more dollars – literally – and know that in the case of an accident, there’s no risk of having a liability or expense that exceeds the amount you’re insured for. Aim for at least $100k coverage of personal liability insurance.
As a new driver, insurance is so important; you can get cheap learner driver insurance from ILD and know that if you’re unlucky, or if you make a mistake while you’re learning, you’re covered. Knowing you have insurance in the case anything happens will help you focus on the road rather than worrying.
There are different types of insurance for different vehicles, as well. You need motorcycle insurance if you’re going to ride a motorcycle. Then there’s gap insurance. If you’ve financed your vehicle and its value is far below the financed amount, if you were to total your car you’d be responsible to the lender for the difference between what you owe and its value. Gap insurance covers that difference so you don’t pay anything out of pocket.
The type of car you drive can change how much your car insurance costs; older cars are cheaper than newer cars, engine size plays a part, and so does the theft rate. Even trim lines can impact the insurance rate a bit. If you haven’t bought a car yet and will be on a tight budget, you can look online to gauge what the best option is to minimize your insurance expense (and then be sure to buy more insurance!).
You have options when it comes to car insurance. Just make sure you choose the right suite of insurance coverage to give you peace of mind on the road.
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