Choosing More Coverage

Posted on: 12 August 2020

The key to securing affordable car insurance is investing only in the insurance products you need. Multiple types of car insurance are available through insurance companies today, but not all of these products will be beneficial for you.

Learn more about the types of auto insurance you can invest in so that you will be able to select the insurance combination that maximizes coverage while minimizing your premiums.

1. Liability Insurance

Most drivers will want to invest in liability insurance because most states require this type of coverage. Liability insurance helps cover the cost of any damages another driver sustains as a result of your actions.

Each state has its own minimum liability requirements. It's in your best interest to work with your insurance provider to determine if you should secure coverage above and beyond the minimum to protect yourself against a potential lawsuit following a collision.

Liability insurance is typically an affordable product, so increasing your limits won't have a significant impact on your monthly premium.

2. Collision Insurance

Collision insurance helps cover the cost of any damages your own vehicle sustains in an accident. It's important to consider the type of vehicle that you drive when determining if you need collision insurance.

Valuable vehicles that would be costly to repair can benefit from collision coverage. If you are insuring an old commuter car that could be replaced for a few thousand dollars, incurring the added expense of collision insurance may not make sense.

3. Comprehensive Insurance

Comprehensive insurance is required on most vehicles that are financed through a third-party. The reason lenders require comprehensive insurance is this type of policy will pay to replace a vehicle that has sustained too much damage in an accident to repair.

If the lender knows that you have comprehensive insurance, they can rest assured that you will be able to repay the loan balance even if your vehicle is totaled.

Comprehensive insurance is often paired with gap insurance, which will cover the difference between the book value of your vehicle and the balance due on your auto loan.

4. Under-Insured and Uninsured Motorist Insurance

Under-insured and uninsured motorist policies are designed to protect you against financial loss regardless of the insurance status of another driver who may be involved in a collision with your vehicle.

When the other driver's insurance doesn't exist or isn't sufficient to pay for your damages, an under-insured and uninsured motorist policy will pay the difference.