Which Auto Insurance Policy Should You Get?

An auto insurance policy is meant to provide financial protection after an accident. However, these policies vary from one insurance provider to another, and the level of protection they provide isn't the same. For this reason, car owners need to get the right coverage depending on their needs.

One way to ensure you get the right policy is understanding the different forms of automobile insurance. Some types of coverage could be mandatory in your state, while others may be optional. This post will share a few policies and what they cover to help you make an informed decision.

Liability Coverage

This auto insurance plan is required in many states. All drivers are expected to get the minimum amount of the plan as stated by the law. Liability coverage usually has two components: the bodily injury liability for paying expenses related to a third party's injuries after you cause an accident, and property damage liability for covering damages you cause to another person's property. 

The plan will also pay for liabilities that arise if the third party dies. Since this plan is vital, it's advisable to ensure the sum assured is high to avoid paying some expenses out of your pocket.

Collision Coverage

Now that you have a policy to cover the third party's vehicle and property damage after an accident, you should get a policy that covers damages done to your car or property. This auto insurance plan is known as collision coverage. You can also rely on it to pay for damages after hitting a fence, tree, or any other stationary object.

Comprehensive Coverage

This insurance plan covers the expenses you will incur to repair or replace your vehicle it it's damaged in a non-collision accident or if it's stolen. This policy covers damage from vandalism, fire, or falling objects such as a tree. 

If you intend to lease your car, your lender will require that you get comprehensive coverage. However, it isn't mandatory to get this coverage if you own your vehicle fully and don't intend to use it for commercial purposes.

Underinsured/Uninsured Coverage

Sometimes, people opt to drive around even when they don't have insurance. If your car is hit by such a driver and they flee the scene, you can rely on uninsured motorist coverage. This policy pays for your medical bills and may cover the vehicle repair costs. 

Also, you will need protection from drivers who have limited liability insurance plans. If the driver hits you, their third-party liability plan may not be enough to pay for your bills. Having an underinsured motorist coverage will help cover the additional expenses.