No matter what year, make, or model car you drive, it is an important investment. It doesn't matter if you cruise around in a brand new SUV or a used sedan, your car is an important asset and needs proper insurance coverage.
Purchasing auto insurance can sometimes be confusing and you may find it difficult to understand all of the details contained in the policy. So before signing on the dotted line with any insurance policy, take some time and make sure you understand what you are buying. Don't be afraid to ask your insurance agent to clarify something or explain why it costs as much as it does.
While insurance laws vary from state to state, here are some typical types of auto insurance coverage you will need in your policy:
- There are two kinds of Liability: Bodily Injury and Property Damage. Bodily Injury Liability pays for any bodily injury to another person due to the negligent operation of your vehicle. The other type pays for any property damage caused by your car.
- Medical payments. These cover medical costs for you even if you are injured or killed in an accident while in your car. It normally pays even if you are responsible for the accident.
- Collision. Pays for the cost of repairing or replacing your car when it is damaged in an accident. It is sometimes possible to lower the cost of this coverage by having a higher deductible.
- Uninsured motorist. This allows you to collect from your own insurance company if you are injured by an uninsured motorist.
- Comprehensive coverage. Pays the cost of repairing or replacing your car when it is damaged due to fire, theft, wind, storm, and other disasters. Just like with collision coverage, it is sometimes possible to lower the cost of the premium with a higher deductible.
- Towing. If your car is disabled, you can have the cost of towing it to a garage reimbursed.
- Rental car. Pays the cost of a rental if your car is damaged due to an accident.
It pays to shop around to get the best prices on automobile insurance. Just make sure you are comparing the exact type of coverage that is available. Don't sign for a policy if you're unclear about any of the clauses or riders.
See also: Disability Insurance and Life Insurance