You love your car. You rely on it to get you from point A to point B in safety, comfort, and style.
But with more than 253 million vehicles on the road in the U.S., the risk of getting into an accident is relatively high.
Those accidents can potentially cost you thousands of dollars, but with the right types of car insurance in place, you’ll be able to keep your savings and take care of your car at the same time. So, which types of insurance do you need?
There’s no simple answer. Read on to learn about the most common types of auto insurance so you can make the right choice for your driving habits and your budget.
Liability insurance protects drivers who are responsible for accidents or property damage relating to the accident. This helps pay for the damage done to the other drivers’ property, their medical treatment, and any other costs associated with the accident.
If they decide to take you to court, liability insurance may help pay the settlement if they win the case.
Keep in mind that liability coverage only extends to the maximum limit on your policy. If the damage costs more to repair or the other drivers’ medical bills are too high, you’ll have to pay the remaining amount out-of-pocket.
Furthermore, you’ll have to pay for the cost of repairs to your car and any medical treatments you receive on your own. Liability insurance won’t cover you or your passengers.
You’re required by law to have liability coverage and if you don’t, you can’t register your car.
Collision insurance helps pay for the cost of repairs if your car gets damaged in a crash, even if you’re responsible for the damage.
That said, collision insurance only kicks in if the accident involves another vehicle. The vehicle can be a car, scooter, motorcycle, or street-legal off-road vehicle. But it must be a vehicle of some type.
Otherwise, you’ll have to pay for repairs on your own.
Not all drivers need to have collision insurance for their cars. If your car is older and not worth much, carrying coverage may be more expensive in the long-run.
Take a look at your car’s value. If you’d pay more for collision insurance than the car is worth by the end of the year, it may be best to skip it. If you’re unsure, ask your agent to help you decide if it’s worth the investment.
Comprehensive coverage protects you from incidents not involving another vehicle. These include falling limbs, hail damage, theft, vandalism, and even water damage.
If you lease or finance a car, you’ll likely need to have comprehensive insurance as part of your lease or loan agreement. But the coverage is a great addition for most drivers who use their cars daily and don’t have the luxury of parking them in a covered garage.
Consider this: in 2018 alone, there were 758 severe weather events in North Carolina. For drivers across the state, those storms caused hundreds of dollars of damage. With comprehensive insurance in place, all you’ll have to pay is your deductible.
This could save you hundreds on the cost of repairs.
Uninsured and Underinsured Motorist Insurance
You’re a responsible driver who always carries insurance coverage, but that doesn’t mean that everyone else on the road does the same. Uninsured and underinsured motorist coverage helps pay for the cost of repairs and medical bills if you’re hit by a driver with too little or no insurance.
The coverage helps pay for any damage to you, your car, or your passengers that exceeds the limits of the other driver’s coverage. This means you won’t have to worry about paying for expensive repairs or costly medical bills out-of-pocket.
As a general rule, uninsured and underinsured motorist insurance is a great investment for any driver that’s on the road. You have no way of knowing if other drivers have enough insurance to pay for the damage they do.
Investing in the policy will help protect you no matter who you encounter behind the wheel.
Personal Injury Protection (PIP)
Personal injury protection works to protect you and your passengers from costly medical bills. If you’re injured in an accident, whether you’re at fault or not, your standard auto insurance may not cover the cost of your treatments.
Personal injury protection covers your medical bills and those of your passengers, even if you’re responsible for the accident.
If you have health insurance, the coverage will help lower your out-of-pocket expense. But if you don’t have health insurance, the coverage will help fill in the gaps.
With the average cost of a trip to the ER running anywhere from $150 to $20,000, PIP is one of the best things you can do for your budget.
Which Types of Car Insurance Do You Need?
There is no single type of car insurance that’s right for all drivers, but some types of car insurance are best for most.
At a bare minimum, you should have a high-limit liability policy in place before you go to register your car with the state. But if you’re looking to protect yourself from expensive repairs after a collision, you’ll want to add collision coverage to your policy.
For drivers who want to protect their cars both on and off the road, comprehensive coverage will protect against other types of threats. But the only way to know which types of policies are best for you is to speak with your insurance agent.
They’ll consider the type of car you drive, the risk factors you face every day, and the accident rates in your community to help you find the right coverage for your needs. Should those needs change, they’ll be able to help you reevaluate your coverage to protect everything you care about.
With so many different types of car insurance, finding the best coverage for your needs and your driving habits can feel like a challenge. You don’t have to go through it alone.
Schedule a consultation with our experienced insurance agents today. They’ll help you find the right coverage for your car and your budget.