Auto Insurance

Driving without car insurance is a disaster waiting to happen. The penalties you’ll face depend, but fines and court fees are almost a certainty. If you’re caught driving with a lapsed policy or with no insurance at all, most insurance companies will charge you a lot more, since you’re an established risk.

Two key issues help you determine the amount of car insurance coverage you need:

   1.  If you have a lease or loan, follow your lender’s requirements.

   2.  Determine the value of your assets (including the car as well as savings, home, and business).

Why do your assets matter? If you’re involved in an incident in which damages exceed your insurance coverage, a court may order you to make up the difference, even if you have to drain your savings or sell your belongings. The cost of additional insurance is minimal compared to the financial impact of an expensive collision or disaster.

A car insurance policy will include a combination of different types of coverage. The five basic types are liability coverage, collision coverage, comprehensive coverage, uninsured/underinsured motorist, and medical payments coverage. We’ll also take a look at coverage types that are optional, but may be useful for your situation.

Liability insurance: If you are at fault in a car accident, liability insurance compensates the other parties involved for their bodily injury and property damage, which is why it is required in almost every state. This can include the driver and passengers of the other vehicle or vehicles involved, injured pedestrians, and the owner of the property where the accident occurred. However, your liability coverage does not compensate you or your passengers.

Collision insurance: Not required by law, but usually required by a lienholder on a leased or financed vehicle. This kind of insurance pays for the damage caused to your vehicle in an accident.

Comprehensive insurance: Not required by law, but usually required by a lienholder on a leased or financed vehicle. This insurance covers damage to your vehicle caused by events other than a collision, such as vandalism, theft, flood, hail, and fire damage.

Uninsured and underinsured motorist coverage: This coverage pays for your and your passengers’ medical bills and property damage if the driver at fault in an accident doesn’t have insurance, has insufficient coverage, or the incident is a hit-and-run.

And More: Several other optional coverages are available to you, to help cover glass breakage, towing, medical payments, rental reimbursement and more. These often are very inexpensive additions to your policy and help cover or defray costs that you might incur.