Most people spend time talking about life insurance and health insurance, but what about car insurance? Whether you drive a fancy car or an older model, you need to make sure that you’re covered in case life decides to hit you or your car. In order to protect yourself, it’s very important to know the types of insurance, how auto insurance works, and how much car insurance you really need! Let’s jump right in.
Basic Coverage
Three of the most important types of car insurance you can have are liability, collision, and comprehensive coverage. This is the basic coverage foundation that you can’t afford to do without.
Liability Coverage
Liability coverage doesn’t protect you or your car, it protects your wallet! If you’re in an auto accident that’s “your fault,” liability insurance can cover third-party costs you’d be responsible for, ie. medical or auto-repair costs. Even if your state doesn’t require this type of insurance, it’s a good idea to have at least $500,000 worth of coverage that covers both types of liability coverage— bodily injury and property damage liability.
Collision Coverage
Auto accidents are very common. The good news is, that no matter whose fault, collision coverage pays to repair/replace your car if you’re in an accident with another vehicle, object, or even yourself. If you’re wondering whether liability insurance would cover any damage to your car, the answer is- only if the other driver is at fault and they have liability insurance to cover the costs.
Extended Coverage
If you have your basic auto insurance covered, you should add an extra layer of protection. There are plenty of options for extended car insurance coverage. So, make sure you go through them with an independent insurance agent
Here are some types of extended coverage
-Medical Payments Coverage (MedPay)
-Guaranteed Auto Protection (GAP)
-Personal injury protection (PIP)
PIP covers-
-Medical expenses
-Funeral costs
-Physical or occupational therapy
-Substitute services like childcare or lawn care
-Approximately 60–80% of lost wages
-Funds to hire subcontractors
