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How much coverage do I need?
How much coverage you need depends on a variety of different factors. In order to make an informed decision, you need to consider the various risks that you, your passengers, and your auto are likely to face. You also need to consider the amount of assets you'd like your car insurance to protect.
How do I get the most car insurance coverage for my insurance dollar?
To maximize your insurance dollar, think about choosing high limits and high deductibles when you buy your car insurance policy.
When you buy your car insurance, get the highest limits you can comfortably afford for coverages like bodily injury, property damage, and uninsured/underinsured motorist bodily injury. Often, higher limits for such coverages don't cost much more than lower limits. However, the higher limits substantially increase the protection afforded by your car insurance.
Carrying high deductibles for relevant car insurance coverages will cost you a larger out-of-pocket fee if you file an auto insurance claim. However, the higher your deductibles, the lower your car insurance premium.
How much auto insurance is required in my state?
Each state has different regulations governing auto insurance coverage. Mandatory car insurance coverages, limits, and deductibles vary from state to state.
Do I need special auto insurance coverage if my car's leased or financed?
Your loan or leasing agreement provides details on the kinds of auto insurance coverage they require. Though each leasing agent or lender has different requirements, most lenders and leasing agents require you to buy comprehensive and collision coverage when you purchase your auto insurance policy. Many also require liability limits in excess of your state's auto insurance coverage requirements.
When buying auto insurance for your leased car, remember that insurers pay only the actual cash value– the market value factoring in age, mileage, and wear and tear– for a vehicle, rather than that vehicle's replacement cost. If you get into a car accident and your leased car is severely damaged, you may find yourself responsible for damages that your auto insurance policy doesn't cover.
What is collision coverage?
In your auto insurance policy, collision coverage helps pay for auto repair or replacement costs if your car rolls over or if your car hits another vehicle or object.
When you buy collision coverage, you'll be asked to choose a deductible. If you choose a deductible of $1000, you'll be required to pay up to $1000 out of your own pocket if your car needs to be repaired or replaced. However, choosing a higher deductible helps decrease your car insurance premium.
What is a collision deductible waiver?
In states where it's available, you have to buy the collision deductible waiver in conjunction with your collision coverage. The collision deductible waiver pays your collision deductible if your insured car is involved in an accident in which an uninsured motorist is held legally responsible.
What is comprehensive coverage?
In your auto insurance policy, comprehensive coverage helps pay for damage resulting from falling objects, fire, certain natural disasters, and vandalism. Comprehensive coverage also generally covers theft.
When you buy comprehensive coverage, you'll be asked to choose a deductible. If you choose a deductible of $1000, you'll be required to pay up to $1000 out of your own pocket if your car needs to be repaired or replaced. However, choosing a higher deductible helps decrease your car insurance premium.
What is liability coverage?
An important part of your auto insurance policy, liability coverage helps you compensate others for their losses if you're responsible for injuring another person or if you're responsible for damaging another person's vehicle or property. Liability coverage also helps you pay the costs of related lawsuits.
Bodily injury and property damage coverage are the two main types of liability coverage in your auto insurance policy. This type of auto insurance coverage is so important that most states require you to have it as a part of your auto insurance policy.
What is bodily injury coverage?
Bodily injury coverage is one of the most important types of coverage in your auto insurance policy. That's because bodily injury coverage helps you pay for an injured person's medical expenses and lost wages if you're at fault in a car accident. Bodily injury coverage can also help protect you in the event of a related lawsuit.
Covered costs are subject to the limits you choose when you buy your auto insurance policy.
Because it's such an important coverage, most states require you to have bodily injury coverage as a part of your auto insurance policy.
What is property damage coverage?
Property damage coverage is one of the most important types of coverage in your auto insurance policy. That's because property damage coverage helps you pay for damages to another person's property (such as a fence, car, or home) if you cause an accident. Property damage coverage can also help protect you in the event of a related lawsuit.
Covered costs are subject to the limits you choose when you buy your auto insurance policy.
Because it's such an important coverage, most states require you to have bodily injury coverage as a part of your auto insurance policy.
What is medical payments coverage?
This coverage pays medical bills and/or funeral expenses if a covered driver and/or accompanying passengers are injured or killed while in an insured vehicle, regardless of who's at fault in an accident.
This may also cover policyholders and their family members when in others' vehicles, or when policyholders and their family members are on foot and hit by a car. Covered costs are subject to the limits you choose when you buy your auto insurance policy.
What is personal injury protection?
Personal injury protection, or PIP, is a set of coverages available only in certain states. In these states, it's often a mandatory part of your car insurance policy.
If you or another covered individual are injured in an accident, PIP plans generally help pay for medical costs, lost wages, essential services, and/or other expenses.
PIP coverage varies widely from state to state. Check the details on the PIP coverage available in your state when you get your car insurance quote.
What is first party benefits coverage?
First party benefits, or FPB, is a coverage the state of Pennsylvania requires you to buy when you purchase your auto insurance policy.
FPB helps pay for your medical expenses if you or relatives living in your household are injured in an accident. When you buy your auto insurance policy, you can also choose optional FPB coverages to help pay for lost income, accidental death, and/or funeral costs.
Covered costs are subject to the coverages and limits you choose when you buy your auto insurance policy.
What is uninsured or underinsured motorist bodily injury coverage?
Uninsured motorist bodily injury coverage pays for medical expenses, lost wages, and other general damages when policyholders, authorized drivers, or passengers are injured in an accident caused by a driver who has no car insurance. Uninsured motorist coverage may also pay for injuries sustained in hit-and-run accidents. Covered costs are subject to the limits you choose when you buy your car insurance policy.
Underinsured motorist bodily injury coverage pays for medical expenses, lost wages, and other general damages when policyholders, authorized drivers, or passengers are injured in an accident caused by a driver who has insufficient car insurance coverage. This coverage typically pays the difference between your coverage and the other driver's bodily injury coverage.
These coverages are available in most states. Many states require you to purchase one or both of these coverages as a part of your car insurance policy. In some states, these coverages are offered together as a single package called uninsured/underinsured motorist bodily injury coverage and provide the protection listed above.
Check the details on the types of uninsured/underinsured motorist coverage available in your state when you get your car insurance quote.
What is uninsured or underinsured motorist property damage coverage?
Uninsured motorist property damage coverage protects you if your vehicle is damaged in an accident involving a driver who has no insurance coverage. This coverage generally pays up to the limit you purchase.
Underinsured motorist property damage coverage protects you if your vehicle is damaged in an accident involving a driver who has insufficient insurance coverage. This coverage typically pays the difference between your coverage limit and the other driver’s property damage coverage limit.
These coverages are available in most states and are mandatory in many. In some states, these coverages are offered together as a single package called uninsured/underinsured motorist property damage coverage and provide the protection listed above.
Check the details on the types of uninsured/underinsured motorist coverage available in your state when you get your car insurance quote.
What is rental car reimbursement coverage?
In some states, you can buy this optional coverage when you buy your car insurance policy. This coverage helps you pay for a rental car if your insured car is damaged or stolen.
What is Emergency Road Service?
Emergency Road Service is an optional coverage that helps you pay for towing if your car becomes disabled.
Should I buy the auto insurance coverage that comes with a rental car?
When you rent a car, the rental company typically offers its own auto insurance coverage. However, you may not need to buy this additional car insurance coverage because you have auto insurance from your own car insurance company.
You may also have some kind of additional auto insurance coverage through your credit card. Check your credit card information and your own auto insurance policy for specific details.
Generally, when you rent a car, the liability coverage limits you have in your own auto insurance policy remain in effect with the same limits. Also, the comprehensive and collision coverages you have in your own auto insurance policy remain in effect with the same deductibles.
However, rental agreements may require additional car insurance coverages that you do not have in your own auto insurance policy. In that case, it's in your interest (and in some cases required) that you buy additional car insurance coverage from the rental company.
It's important to know that, if you get in to an accident in a rental car, you may find yourself responsible for damages that no typical auto insurance policy covers. For example, if you have collision and comprehensive coverages on your own auto insurance policy, note that your coverage is typically for the actual cash value– the market value factoring in age, mileage, and wear and tear– for a vehicle, rather than the replacement cost some rental companies charge customers if they wreck a rental car.
Some rental companies may also charge customers for the diminished resale value of a wrecked rental car or for lost rental income while a damaged rental car is being repaired.
Before you rent a vehicle, understand the charges you might be responsible for and how these charges are covered or not covered by both your own auto insurance policy and the car insurance the rental company offers.
Is my American auto insurance coverage valid in Mexico?
Though most American car insurance companies provide auto insurance coverage for driving within Mexican border areas, Mexican laws concerning liability in car accidents make it a good idea to purchase auto insurance coverage from a Mexican insurance provider when crossing the U.S.-Mexico border.
Is my American auto insurance coverage valid in Canada?
Your American auto insurance coverage typically covers driving in Canada. Check your auto insurance policy for full details.
Is my American auto insurance coverage valid in Europe or other parts of the world?
If you're driving anywhere outside the U.S. and Canada, your American auto insurance coverage is typically not in effect.
You should purchase car insurance from the foreign car rental company at levels similar to your auto insurance coverage in the U.S. Make sure that the car insurance provided by the rental car company complies with auto insurance regulations in all the countries where you plan to drive. |
