Auto Insurance
Why do we need car insurance? It's the law. All states have a minimum requirement for auto insurance coverage. Accidents are expensive and most people cannot afford the cost on their own. Auto insurance coverage ensures that people can cover the cost of injuries and vehicle repairs in the event of an accident.
Auto insurance policy terms and types of coverage
Deductible is the amount you must pay out of pocket before Insurance will pay anything. $500 is a common deductible.
Liability covers accidental injury to persons or property; this is the minimum generally required by law.
No-Fault covers one's own collision related costs no matter how or why it happened. Some states prefer this method.
Collision covers the damages to your own vehicle when hit by another.
Comprehensive covers damage to your own vehicle by natural elements or persons without a vehicle.
Medical:
covers medical expenses caused by an auto accident.
Personal Injury Protection:
Personal Injury protection covers medical expenses for the driver regardless of fault.
Uninsured Motorist:
Covers your own car when an uninsured driver hits it.
Underinsured Motorist:
Covers damages to your own car that go beyond what the other driver's insurance covers.
Rental Reimbursement:
covers the damage to a rental car from an accident.
What type of coverage you need
You will need the minimum that your state requires. If you have an expensive car you will want more coverage. If your car is worth only $500 more than the deductible, it would be cheapest to pay only the minimum state requirement. If you do not have health care, you may want to buy a medical coverage.
