For starters, most drivers should have at least three types of car insurance: liability , comprehensive and collision. Yet one in eight Americans drives without some kind of auto insurance in place. Let an independent auto insurance agent find you the best deal. We get you quotes from all the providers. Get the right coverage at the right price!
Another reason to get car insurance is because it protects your finances and assets. How else are you going to cover the costs after your teenager accidentally drives your SUV through the garage door?
The right amount of car insurance can really save your financial skin. More on the average costs later. The deductible is what you have to pay before your insurance company will pay their share. A premium is what you pay for your coverage usually monthly. Your coverage limit is the maximum amount your policy will pay for each type of coverage. Now, there are a bunch of different types of car insurance. The most important ones are liability , comprehensive and collision coverage.
If you have all three, it means you have full coverage. Liability insurance covers costs like medical or repair costs for other people if you cause an accident. Every U. But those state minimums are not nearly enough to protect you. Comprehensive coverage protects you from things like theft or damage from a fire, a storm, a natural disaster or even a tree branch falling on your car.
So, do you need collision? The only time you might not need collision is if your car is paid off and, again, you could replace it from your savings. All financial goals ». Investing insights. See banking services provided by Axos Bank ». Email for closed account inquiries Nationwide Bank Nationwide Advantage Mortgage Company More info about closed bank account inquiries. On your own Renting your first apartment Buying your first home Your first job Learning how to budget.
Family life Getting married Budgeting your money Having children Furry friends. Planning for retirement Choosing a financial professional Retirement planning Investing resources Downsizing Income in retirement. Personal Business. Resources Auto insurance. Liability coverage Liability coverage is required in most US states as a legal requirement to drive a car. Collision insurance Collision insurance may cover damage to your car after an accident involving another vehicle and may help to repair or replace a covered vehicle.
Comprehensive insurance Comprehensive insurance can provide an extra level of coverage in the instance of an accident involving another vehicle.
This coverage has a deductible , which is the amount you'll pay out of pocket before your insurer reimburses you for a covered claim. Comprehensive is typically an optional coverage — but your lender may require it if you're leasing or paying off your vehicle. If you're involved in an accident with another vehicle, or if you hit an object such as a fence, collision coverage may help pay to repair or replace your car up to its actual cash value and minus your deductible.
Collision coverage is typically optional. It may be required, however, by your vehicle's leaseholder or lender. Learn more: What is Collision Insurance? If you, your passengers or family members who are driving the insured vehicle are injured in an accident, medical payments coverage may help pay for costs associated with the injuries. Covered costs may include hospital visits, surgery, X-rays and more.
Personal injury protection, or PIP, is only available in some states. Like medical payments coverage, PIP may help pay for your medical expenses after an accident. In addition, PIP may also help cover other expenses incurred because of your injuries — for example, child care expenses or lost income.
Personal injury protection is required in some states and optional in other states where it's available. You may be able to add the following optional coverages to your car insurance policy, depending on your situation. Your insurance agent can help you understand what each helps cover, so you can put together a policy that's right for you. Need help understanding which coverages are required and optional in your state?
Talk to a local agent. This optional add-on may cover the costs commonly associated with roadside breakdowns, such as dead batteries, flat tires, lockouts or towing your vehicle to a repair shop after an accident. This coverage is sometimes automatically included in your policy — make sure to check to avoid buying protection you may already have. Gap, or guaranteed asset protection, helps cover the difference between what your insurance will pay if your car is totaled — usually the current cash value of your car — and what you owe on your auto loan.
A number of factors determine the types of car insurance you should carry. When choosing your coverage limits, consider the minimum amount of coverage required by your state.
Then, consider your financial situation. The cost of your premium increases as you choose higher coverage limits. But before you buy the minimum amount of coverage to keep your monthly premium cost down, weigh the premium you can afford each month against how much you could realistically pay out of pocket if you were in an accident. The same goes for deductibles. A higher deductible will generally lower your premium.
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