If you own a car, you are legally required to have car insurance. For first-time car owners, shopping for insurance might be a confusing process. There are many different types of insurance policies available on the market. To be able to choose among them, you need to know what the requirements are for your particular type of vehicle.
If you buy the wrong type of insurance, you will either have to pay a needlessly high premium or fall short on coverage when an incident does occur. Here are some major types of insurance available for your vehicle. There are also tips on deciding which one is right for your needs.
Your car can suffer from all sorts of problems. Collisions are by far the most common issue that can befall your vehicle. But there is much more that you are going to need coverage for. Theft and damage to your car from things other than a collision is covered by comprehensive coverage.
Who should get it: You should get comprehensive coverage for cars that are new and worth a lot. It is always good to have comprehensive coverage. But since the premium for it can be so high, a lot of people choose to forego it if their car is old and not worth the amount they pay in premium. Also, get it if you live in an area prone to natural disasters such as storms and floods.
When you drive a car, there is always the chance that you will get into an accident through a fault of your own. Liability insurance is mandated by state laws to ensure that if you get into an accident and are ordered by the court to pay for the other party’s medical bill or car repair costs, you will be able to pay for it through the insurance.
Who should get it: Most states require drivers to get this insurance, so it is rarely a matter of choice. Even when it is, getting this insurance should be a priority for all drivers.
This is extremely important as collisions can cost you thousands of dollars in repairs. The limited liability insurance will take care of the other person’s car in case of an accident, but you may be left unable to pay for repairs for your car in case you don’t have collision coverage.
Who should get it: Some people choose not to get collision coverage if their car is old and they have more than enough money to replace it in case something happens. Owners of new vehicles almost always get this type of insurance.
These are just the three main types of insurance that you can get for your personal vehicle. If you own a commercial fleet, then the list can be expanded to fit in a lot more coverage. Many people who own brand-new vehicles get different types of insurance such as personal injury protection and no-fault insurance, which that you can research if you are interested.