What to Consider Before Buying an Auto Insurance Plan
Whether you’re a young driver or an older driver, the odds are against you when it comes to being involved in a car crash. According to research, roughly one in three drivers will be involved in a car crash at some point in their lifetime.
That means that, unless you’re planning on keeping your car for many years, it’s more likely than not that you’ll need auto insurance sooner rather than later. With this in mind, it makes sense to look into different types of auto insurance before signing up for any plans.
Depending on your circumstances and needs, there are a number of different types of auto insurance that you might want to explore further before making a final decision. Here we’ll break down some of the key differences between each type so that you can make the right choice for your needs and situation.
What is auto insurance?
Simply put, car insurance is a type of protection that helps you financially protect yourself against the costs of repairing or replacing your vehicle should it be damaged.
While most states mandate that drivers carry some form of auto insurance, there’s also a significant difference between what’s required and what’s actually offered. In order to legally drive on public roads, drivers are required to have a minimum amount of auto insurance coverage.
In fact, depending on the state you reside in, you may be legally required to have more than the minimum amount. What’s more, if someone were to damage or end up causing damage to your vehicle, you’ll be able to file a claim with your provider and receive repair or replacement services.
Collision Insurance
Collision insurance is the most common form of car insurance found in the United States. As the name suggests, this type of insurance coverage is triggered whenever there’s a collision with another vehicle. To make things easier, most collision insurance plans will cover the cost of repairing or replacing your own car should it be damaged by another vehicle.
While collision coverage is a standard type of auto insurance found in most states, it can vary significantly between providers. This is because collision insurance is usually determined by state laws and regulations.
To get a more thorough understanding of what’s required and what’s standard throughout your state, it might be worth checking with your state insurance department or licensed insurance agent.
Comprehensive Insurance
While collision insurance will help you financially protect yourself against the cost of repairing or replacing your vehicle in the event of a collision, it doesn’t provide any coverage for other damages. In other words, if you were to cause damage to another vehicle or even your own car, you’d be on the hook for the repairs.
If you’re looking for something more comprehensive, you might want to consider purchasing a form of comprehensive insurance. A comprehensive policy covers many types of damages and damages to your car, regardless of how they were caused.
To determine the amount of comprehensive coverage you’re able to purchase, most insurers will use a form of “all risk” or “per peril” analysis. What this means is that the insurer will calculate the cost of the damage per accident. So, while comprehensive insurance is generally a good idea, it’s important to make sure it fits your needs and budget.
Roadside Assistance
Roadside assistance is a form of coverage that’s typically included in every type of auto insurance policy. This coverage is designed to help you out if you’ve been in an accident and your car is damaged beyond repair.
Typically, the person who helps you will come to your car, help you get back on the road, and then take you to a nearby gas station or service station to get some help in fixing the damage. Depending on the policy you have, the amount of roadside assistance you’re able to receive will vary significantly.
It’s important to remember that roadside assistance is only a safety net. If you’re able to get back on the road, it’s up to you to fix the damage that’s been caused.
Towing and Repairs
Towing and repairs are generally optional types of coverage that you’ll be able to purchase as an add-on to your standard auto insurance policy. When someone swears at you for no reason and damages your car, you’re able to file a claim for towing and repairs.
A towing and repair policy is typically only available for a small amount of additional cost. It’s important to note that, while towing and repair coverage makes sense, it’s not required in every state.
Keep in mind that towing and repair coverage is usually calculated by the type of vehicle being towed and the distance being driven before the damage is deemed to be considered “too much.” To get a more accurate idea of how much to expect, it might be worth checking with your state insurance department or licensed insurance agent.
Other Types of Coverage
While collision insurance, comprehensive coverage, and towing and repairs are three of the most common types of coverage in auto insurance, they’re not the only ones available. If you’d like to add some extra protection, you might want to explore buying a rider or a naming-rights policy.
A naming-rights policy costs a small amount of additional money and helps protect your rights if there’s a dispute between you and your insurance provider. For example, if there’s a problem with your claim or you think your provider has been unfair or deceptive, you’ll be able to take the dispute to a neutral third party.
Final Word
Whether you decide to buy car insurance or not, it’s important to be aware of the risks that come with driving. The fines and fees associated with reckless driving can be substantial, and even a minor fender bender can quickly add up.
In this article, we’ve broken down the key differences between each type of auto insurance. Hopefully, this will help you make an informed decision when it comes to choosing the best type of coverage for your situation.
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