Do you know the difference between comprehensive and collision auto insurance coverage? Do you know what type of insurance you need to carry to make sure you're covered in case of a hit and run? Do you know how much liability coverage you need to protect you from out-of-pocket expenses in the event of a major accident?
If you answered no to even one of these questions, there is a good chance that your auto insurance policy may not be providing as much coverage as you think. This is because insurance policies truly need to be customized in order to provide the right level of coverage for you. If you do not understand the different coverage options or know how to determine how much coverage you should buy, how can you expect to properly customize your policy? That is why it is so important for you to take a few minutes and review the different options that are available to you and what each of these options provides.
Selecting Liability Limits
You will not have a choice regarding whether or not to include liability insurance in your policy. This is because the law requires you to carry a certain amount of liability coverage. However, your coverage limits will be up to your discretion as long as you are purchasing at least the minimum amount of coverage required by law.
When determining how much coverage you wish to purchase, take a moment to consider what would happen if you were to cause an accident that resulted in serious injuries or the total destruction of someone's brand new vehicle. If your coverage limits are not enough to cover the costs associated with paying medical bills and replacing the vehicle you totaled, you could find yourself being on the hook for the remaining expenses. Paying a few extra dollars each month to increase your policy limits may be worth avoiding this type of situation.
Including Or Declining Comprehensive And Collision Coverage
When customizing your policy, you will have the choice to either include or decline both comprehensive and collision coverage options. Depending on what insurance company you choose, these coverage options may be paired together or purchased separately. However, it is important for you to understand that these are two very different types of coverages, despite the fact that they are often marketed as a pair.
Comprehensive coverage provides you with coverage for damage to your vehicle that occurs outside of a traffic accident. For example, if your vehicle is stolen or damaged as the result of a natural disaster, comprehensive coverage is the type of coverage you need if you do not want to find yourself paying out of pocket for any resulting repairs or replacement costs.
Collision coverage on the other hand provides you with coverage for damage to your vehicle that does result from a traffic accident. More specifically, this type of auto insurance provides coverage for damage that results from an accident that you caused.
Including Or Declining Uninsured And Underinsured Motorist Coverage
While it would be wonderful to live in a world where every driver on the road had high quality car insurance, the fact is that many drivers carry either a minimal amount of coverage or sometimes even have no coverage at all. If you end up in an accident with one of these drivers, including an uninsured and underinsured motorist coverage in your policy will ensure that you are still covered for any resulting damages.
For more information, contact a local car insurance company near you to learn more.