Insurance Questions About Your Car or Truck

If you own a car, you need car insurance. Every state in the nation requires auto insurance, because it protects everyone on the road. As you are shopping for an insurance policy for your vehicle, here is what you need to know.

There are four main types of car insurance that people purchase. Everyone must have liability coverage, which protects other people and their property from accidents that you cause. Some choose to purchase collision coverage. This pays for damage to your personal vehicle, even if you caused the accident. Comprehensive coverage will pay for damage to your car that was not caused by a collision. Personal injury protection will pay for injuries you sustain in a crash, even if you were liable for the accident.

When you purchase a policy, you are allowed to choose the deductible amount for various parts of the policy. For instance, you could have a $500 deductible for your personal injury protection. This would mean that the insurance company would not pay anything for injuries you sustained for an accident that was your fault until you had paid $500 out of pocket. You can set deductibles as high or low as you want. The higher your deductible, the lower your premium cost. You should choose a deductible that is as high as possible, without being out of reach if you needed to pay it suddenly.

You also need to choose how much coverage you will have. All states have minimum coverage requirements, but you may wish to raise the limit. For instance, if your state requires you to have $20,000 liability coverage, you may wish to increase this. If you were sued for more than $20,000, which is very likely, you would be responsible for the rest of the settlement out of your own pocket.

If you need to save money on your policy, you do not have to purchase insurance for yourself or your vehicle, provided you own the car outright. However, this would mean that you would receive nothing if your car were totaled in an accident that you caused. You need to decide if the amount of money you would save on the insurance is worth this risk.

Make sure that you are not paying more for your insurance than the car is worth. Look at how much you pay each year, and compare that to the value of the vehicle. If the numbers are close, you should consider dropping your collision coverage, which covers your vehicle, because you would not receive much for the vehicle if it were totaled. You could be putting the money you are paying towards insurance into a savings account to give you a nice down payment on a new car if you need it someday.