Auto Insurance 101 Explained

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Auto insurance can be confusing for most consumers; there are so many types of insurance, and it can be difficult to determine the type of coverage you are required to carry than other types of coverage you really need to bring in order to protect themselves, but that is not necessary.
Auto Insurance 101 explained

When considering how much car insurance you should have, it is best to do some research and find out what type of insurance required by the state in which you reside. Not all states require the same level of insurance. Some states require more types of coverage than others and states also vary in terms of the amount of coverage required. So, make sure you know exactly what the minimum in the country where you live.

You also need to understand what is covered by the types of insurance to understand Are you require insurance above and beyond the minimum required by the state you live.

Injury liability covers injuries that cause others while driving your vehicle. Generally, the rules for this type of coverage is to purchase more than the minimum required by your state to protect your personal assets from lawsuits in the event that you injure someone.

Medical payments or personal injury protection, known as PIP covers the treatment of injuries to the driver and passengers of the vehicle. Depending on the level of coverage, the type of policy will replace lost wages and medical payments.

Collision covers any damage that occurs to your vehicle in case of an accident, even if it is your fault. Of course, the deductible will apply. Your lender will generally require the type of coverage while you still owe on the vehicle.

Comprehensive coverage is for the loss of your vehicle due to damage by something other than a collision, such as theft, fire, natural disaster, vandalism, etc. Again, your lender will probably require this coverage for a financed vehicle. After the loan is paid, up to you whether you want to continue the comprehensive and collision coverage.

And underinsured motorist insurance coverage can be useful in the event that you are both involved in a hit and run or if you are pressed by someone who does not have insurance or are underinsured.

When considering how much insurance to take out, start with the minimum amount required by your country and then consider whether you are required to take out any additional coverage due to loan terms. Remember that while we all hope we will not have a need for insurance, in the event that we do, it can be a financial lifesaver.

Finally, do not forget to consider your options regarding deductibles. Increase your deductible can help you lower your premiums and that can make taking additional insurance more affordable. Just make sure you are quite capable deductible if you have to use it.