Many people think that when they buy a car that choosing their insurance coverage will be just as straightforward as finding the right car. The fact is that car insurance can actually be pretty complicated. Many people simply nod their head and make their monthly insurance payments but they don't really understand what their coverage offers them.
Car Insurance Basics
Liability coverage is likely to be offered when you buy your car insurance. This is the basic coverage that you will find with any insurance policy and basically what this coverage does is pay for the bodily injury and property damage that is caused to others involved in the accident that you are at fault for.
Together, bodily injury coverage and property damage pays for the medical bills, lost wages and repair or replacement of the property that you damaged. This coverage does not pay for the damage that happens to you or your vehicle.
Liability insurance is often broken down into numbers such as 20/40/10, which means that your coverage includes $20,000 in bodily injury, $40,000 in bodily injury per accident, and $10,000 in property damage coverage.
In case you cause an accident then in case of an collision or comprehensive coverage, the cost to repair your vehicle as well as the vehicles and people you injured in the accident are included. This does not happen in liability coverage. With this type of coverage you won't be able to receive more than the value of your car, but you will get something to put toward repairs or replacement of the vehicle.
This coverage is the most expensive one. But if you select to have a high deductible you will be able to keep your payments down and still have this coverage that you need if you are involved in an accident. People generally go in for comprehensive coverage and consider it is as the ideal coverage as it also covers the damages caused to your car such as fire, theft, natural disasters, and/or hitting animals in the road.
There are other coverage options that you might choose to make a part of your car insurance policy. One such option is medical payment coverage. This coverage will pay for your as well as your passengers medical expenses when you have been involved in an accident.
One of other options also include PIP (personal injury protection) coverage. This coverage can help pay for those medical expenses but will also help you if you are unable to work, unable to take care of your kids, or if you have to pay for a funeral.
Of the available coverages', uninsured or underinsured motorist's coverage is another type which you could purchase. This coverage will help you pay for damages if you are struck by an uninsured or underinsured individual.
Other options that you may want to consider are rental reimbursement if you have to rent a vehicle because yours is in need of repair or stolen, towing and labor coverage, and gap coverage, which is coverage that pays the difference between the cash that you receive for a total car and the amount left on the car loan. When you are in any these situations, the add on features can come in really handy.
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