Liability Insurance

Liability insurance covers you in the event you are in a covered car accident and it is determined the accident is a result of your actions. Liability insurance will cover the cost of repairing any property damaged by an accident as well as the medical bills from resulting injuries. Most states have a minimum requirement for the amount of liability insurance coverage that drivers must have. However, it is usually a good idea to have liability insurance that is above your state’s minimum liability coverage requirement. This will provide extra protection in the event you are found at fault for an accident where you are responsible for any claims that exceed your coverage’s upper limit. You wouldn't want to run the risk of having to pay a large amount of money because your policy limit has been exceeded.

Collision Coverage

If there is a covered accident, collision coverage will pay for the repairs to your car. If your car is totaled (where the cost to repair it exceeds the value of the vehicle) in an accident, collision coverage will pay the value of your car.

If you have an older vehicle, collision coverage may not be worth the investment (depending on the vehicle value). On the other hand, if you have a more expensive car or one that is relatively new, collision insurance can help get you back to where you were before any damage to your car. Note: If you have a lienholder, this coverage is required.

Comprehensive Coverage

What if something happens to your car that is unrelated to a covered accident?What about weather damage? What if you hit a deer or your car is stolen? These type of situations will be covered under comprehensive coverage. Note: Liability insurance and collision coverage will only cover accidents and not these other listed events. Liability insurance and collision coverage cover accidents, but not these situations. These situations are covered by Comprehensive (other than Collision) coverage.

Comprehensive coverage is great to have if it fits in your budget. An anti-theft device or a tracking device can make this coverage slightly more affordable. However, if your car is easily replaceable this coverage may be a burden, and an unnecessary increase in cost. Note: If you have a lienholder, this coverage is required.

Personal Injury Protection

While Comprehensive coverage may be something you don’t need to purchase, Personal Injury Protection (PIP) is something you should. The costs associated from an accident can quickly add up, and in order to cover those costs Personal Injury Protection is available. PIP covers your medical bills along with any passengers will be paid no matter who is at fault for the accident. Note: This coverage is not available in all states.

Uninsured /Underinsured Motorist Protection

State laws mandate that all drivers should be insure. This unfortunately is not always the case. Another issue that can arise is that while a driver may have liability insurance, many states have relatively low minimum coverage requirements that may not be enough to cover all of the expenses of an accident. When someone is legally responsible for damges related to an accident, you won’t receive any payment if they are uninsured. You will receive less than you need to cover the cost of damages if your damages exceed their coverage amount if they are underinsured. This is the type of situation where Uninsured and Underinsured Motorist Protection would help with expenses.