If you’re finding car insurance for yourself for the first time, or if it’s even just your first time trying to navigate the maze of different car insurance options, it can get pretty overwhelming. Legally required minimum levels of insurance vary by state, but then there are various types of car insurance beyond that, and finding the right ones for you and your car and lifestyle can be difficult and stressful.
It’s all about considering what you are most at risk for and contemplating how or if you would be able to handle hypothetical accidents without insurance. Think about what your personal insurance needs are, depending on your driving and life habits and your ability to financially deal with emergencies, and put together the perfect insurance policy for you. Here are the main categories of insurance you should understand.
Liability insurance refers to insurance policies that pay not for damages that you sustain but or damages that you cause. It kicks in when you are at fault or held liable for an accident, and it will directly pay back the other driver or drivers for their damages and injuries. Insurance policies will have a specific dollar amount that they are able to pay out in these situations.
This category of insurance comes in two varieties. There is liability insurance for property damage, whether it’s their vehicle or some other part of their property that you hit with your car. Then there is liability insurance for personal injury, which will kick in to pay for any medical expenses they incur because of your actions in the car accident.
Collision and Comprehensive
Unlike liability, collision and comprehensive insurance pay for damages sustained by your own vehicle. If not paid by another driver’s insurance, collision coverage can compensate you for harm to your car from a car accident or even from a collision with something else like a fence or a telephone pole.
Comprehensive coverage often comes bundled with collision insurance, and it can help you to ensure against unexpected damage to your car that isn’t caused by any actual collision or crash. It should help you to repair or even to replace your vehicle if it’s stolen or if your vehicle is damaged during a storm or randomly hit by a falling tree.
Uninsured or underinsured motorist insurance is for just what it sounds like. If another driver causes an accident with you, their liability insurance should cover your costs. But if they’re driving without proper insurance, it may be difficult or even impossible to be properly paid back. It’s also possible that they’ll have insurance, but that their policy is not able to cover the entire cost of the damages they’re responsible for. This insurance kicks in to cover your costs in such a case.
Personal injury insurance coverage is a category of insurance that can make things simpler by paying for medical costs without regards to liability or fault in the actual accident. It will help to reimburse you for medical costs for you or your passengers, and it can also cover other costs that come as a result of the accident like child care or lost income.
Nearly every state in the United States requires liability insurance of some level for all drivers. Some states like Florida have a financial responsibility law that requires liability insurance for property damage and personal injury insurance for medical costs. Other states also require underinsured/uninsured driver insurance or other types.