Driving without auto insurance coverage is illegal in most states. Each state has unique minimum requirements that drivers must meet, but many drivers choose to purchase more coverage than what is legally required. This type of coverage offers true benefits to you if you experience a wide range of covered losses related to your vehicle. A closer look at the available car insurance coverage types will help you to set up a policy that most closely meets your current needs.
The primary car insurance types are liability, collision and comprehensive insurance. Liability auto coverage pays other people for any expenses they incur from your driving activities. For example, if you run your car into someone’s house, liability insurance pays for the homeowner’s repairs. The cost to repair your own vehicle will not be covered by the liability portion of your policy. Collision insurance for your car will pay for repair work or for a full vehicle replacement related to damages in a collision only. Comprehensive insurance provides the same benefits as collision, and it also covers damages for theft, fire, weather events and more. Some drivers choose to add optional coverage that they believe would be beneficial in specific instances. For example, towing coverage, rental car coverage, personal property coverage and more are available upon request by most providers.
Your insurance rates are usually determined based on a wide range of factors, and each insurance provider reviews these factors differently. The make and model of your car, your gender and age, where you live, how far you commute, the safety features and more are all reviewed before your rates are calculated. Many auto insurance providers also offer discounts related to safe driving, students, military service, bundling polices and more.
Car insurance is necessary to comply with the law in most areas, and it also can help you to avoid dealing with huge financial losses if you experience an unfortunate event with your vehicle. Because coverage types and limits vary, you need to understand more about coverage types so that you can set up the right coverage for your needs.