Car insurance protects you in the event of an accident or damage to your vehicle, but many people don't know how much coverage is necessary. Here's some information to help you select the right types and right amount of auto insurance to properly protect you when driving.
Sufficient insurance coverage is essential and is required by law in most states. You may opt for the minimum insurance coverage required by law, but that may not fully protect you if you're at fault in an accident. For your protection, it's better to carry more than the minimum insurance coverage.
Most car insurance companies offer a variety of coverage options to protect you and your passengers, your vehicle and other drivers, including:
Liability
Collision
Comprehensive
Uninsured/Underinsured Motorist
Medical
Personal Injury Protection (PIP)
Umbrella (optional)
Liability insurance
Liability insurance pays for injuries and property damage caused by a crash if it's determined you were at fault, and is required in every state except New Hampshire. Liability insurance does not cover injuries to vehicle occupants, or damage to your vehicle. Your policy should provide coverage for no less than $100,000 per person, $300,000 per accident and $50,000 for property damage, or no less than $300,000 if your policy has a single limit. You will be liable for claims exceeding your coverage, so consider buying additional coverage if you're able.
Collision insurance
Collision insurance pays for damage to your vehicle in an accident. If your car is totaled, you'll receive what the insurer considers to be the pre-crash market value of your car, minus your deductible.
Comprehensive insurance
Comprehensive covers theft of your vehicle and non-collision damage to your car, as well as animal collisions. You may be eligible for car insurance discounts if your vehicle has anti-theft or tracking devices.
Liability, collision and comprehensive insurance are what finance companies require when purchasing or leasing a vehicle. There are other types of insurance you may wish to include with your auto insurance coverage, including:
Uninsured motorist or underinsured motorist protection is required by many states, and covers injuries to the occupants of your car if the other driver has insufficient or no insurance. In the event of a qualifying accident, the insurer pays the difference between what the uninsured driver can pay and what the injured driver would be entitled to.
Medical protection provides coverage for you and your passengers, regardless of fault.
Personal Injury Protection (PIP) insurance provides additional protection including rental-car coverage and roadside assistance.
With Umbrella coverage, "umbrella" refers to how the policy shields the insured's assets more broadly than primary coverage, and provides extra protection beyond your car insurance limits, in case of something unexpected.
Author is a freelance copywriter for Mercury Insurance. Talk to a Mercury agent today to learn more about car insurance discounts for safe drivers. Ask for a free auto insurance quote by calling 1-800-956-3728 or by visiting http://www.mercuryinsurance.com/. At Mercury Insurance, our low rates are just the beginning.
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Christine M Harrell
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