In most states, when you own a vehicle, you have to carry auto insurance on your vehicle. When it comes to auto insurance, there is coverage you are required to have, and optional coverage that you can pay for. It is important to know the difference.
Required Insurance Coverage
First, you need to understand the insurance coverage you are required to carry in most states. In most states, you are required to carry bodily injury liability coverage as well as property damage liability coverage.
Bodily injury coverage - This type of coverage is designed to cover the medical bills and other expenses if you are responsible for an accident that injures other people. This type of coverage will also protect you from getting sued if someone is injured in an accident that you were at fault for.
Property damage - This type of coverage is designed to cover the expenses if you damage someone else's property. So if you damage another vehicle and you are responsible for the accident, your insurance will pay the damages to fix the vehicle. Or if your car hits a building, your insurance will pay to fix the property damage.
Required insurance coverage is about protecting yourself from the liability you face when you injure or harm someone else's body or property. It does not protect your property or help you with medical bills you could face yourself.
Optional Insurance Coverage
Optional insurance coverage is more about taking care of yourself. There is a wide range of optional insurance coverage you can add to your policy.
For example, collision coverage is what you need in order to protect your vehicle. If you get into an accident, and you have collision coverage, regardless of who is responsible, your insurance will make sure the cost of repairing or replacing your vehicle is covered.
Another type of coverage you should consider adding is comprehensive coverage. This type of coverage will protect you from damage that doesn't occur during a vehicular accident, such as if someone steals your vehicle, or something falls on your vehicle and damages it.
You may also want to add rental insurance coverage. This type of coverage will cover the cost of using a rental vehicle if you need one while your vehicle is being repaired or replaced following an accident.
It may also be a smart idea to consider some uninsured coverage, which will protect you if you are in an accident caused by an uninsured party.
When you own a vehicle, you need to make sure you carry the minimum insurance required by the state. You also need to look into what optional coverage makes sense for your particular situation. Your auto insurance agent can help you figure out the best optional coverage for you to carry.