Important Things You Need To Understand Before You Buy Car Insurance Coverage

Buying car insurance coverage can be quite a challenge. Not only does car insurance have a language that is all its own, but there are also many different types of policies. It's hard to know which one is the right choice for you. There are a few things you need to know before you buy car insurance coverage that will make the shopping process a little easier.

Car Insurance Coverage is Mandatory in Most States

According to The Balance, there are two U.S. states that do not require drivers to carry a specific minimum amount of car insurance coverage:

  1. Virginia
  2. New Hampshire

While Virginia residents can skip the requirement altogether by paying $500 to the state annually, it is absolutely not in your interest to do so. You still remain financially responsible for injuries and proper damage you cause behind the wheel if you are the one who caused the damage. All other U.S. states have minimum car insurance coverage requirements that vary greatly from one state to the next. At the very least, even if you own your car outright, you must carry this minimum amount of auto insurance protection.

You Likely Need More than Minimum Coverage

First of all, the minimum car insurance coverage required in most states is exactly that – minimum. It offers little, if any, protection for you if your car is damaged by another driver and may not be sufficient to cover your responsibility to the other driver if your accident causes anything beyond minimal damage.

If you have a loan for your car that isn't paid off, your lender likely requires you to carry "full coverage" on your vehicle sufficient to cover what you owe on your vehicle. A full coverage insurance policy provides varying degrees of coverage for the following:

  • Liability. This includes both bodily injury liability and property damage protection. Your state has its own minimum coverage requirements. In most cases, you'll want to increase those numbers substantially.
  • Uninsured or underinsured motorist protection. While your state may have laws requiring drivers to carry insurance, invariably drivers either have none or have too little. It is in your best interest to invest in this critical car insurance coverage to fill in the gaps.
  • Comprehensive coverage. This insurance coverage provides protection for damage to your vehicle caused by something other than a collision, such as fire, vandalism, hail, falling objects, etc.
  • Collision coverage. Provides protection for you if you are involved in a collision with an object, animal, or another vehicle.
  • Medical payments coverage. This helps to pay for accident-related medical bills for you and passengers riding in your vehicle when an accident occurs.
  • Personal injury protection. Sometimes referred to as PIP, this policy works very much like medical payments coverage by helping to cover your medical care costs related to the accident.

Car insurance coverage is essential for drivers today. The better you understand your coverage, and what it protects, the better-informed buying decisions you can make. To learn more information about getting car insurance, reach out to a company such as The Policy Center.


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