When it comes to purchasing auto insurance, determining what kind of coverage you need can be downright confusing. There are so many terms being thrown at you – liability coverage, comprehensive coverage, collision coverage, PIP – but what exactly do they mean and do you need all of them?
If you’re at fault in an accident, you could be held legally responsible for all medical and repair costs for everyone involved. Liability coverage can shield you from these potentially devastating expenses.
Collision coverage typically pays for damages if you’re in a covered accident that involves other cars or objects, like a tree or a streetlight.
Comprehensive coverage typically pays for damages on covered costs that aren’t caused by a collision. Some situations where this coverage would come into play include: storms or natural disasters, vandalism, theft, a broken window or windshield, hitting an animal or if something falls on your car. The actual cash value of your car is the most that this coverage can pay out – and it factors in things like your car’s purchase price, age, wear and tear.
Personal Injury Protection coverage (also known as PIP), not only covers reasonable and necessary medical and hospital expenses when an insured is involved in a covered loss, it can also help you with other expenses while you’re healing. These vary state to state, but can include: income continuation, loss of services, funeral expenses and child-care expenses.
Because these coverages protect you against different types of losses, it’s a good idea to include as many of them as you can afford on your policy. Liability coverage is required in most states. The other coverages are usually optional.
When you request auto insurance quotes the companies providing your quotes should be able to tell you what coverages are required in the state where you live. Whether you were planning to get just the minimum, or as much coverage as possible, it’s a good idea to price out all the coverages available when getting your free auto insurance quotes.
Here’s a checklist of the most common options available: liability, medical payments, underinsured/uninsured motorist, collision, comprehensive, PIP, towing and labor cost coverage, rental car reimbursement and sound system or tape coverage.
Courtesy of ARAcontent
