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The topic of getting enough coverage on car insurance is a yearly discussion by both seasoned veterans and first time drivers alike. As you shop for car insurance, there are many coverage packages you´re going to be offered. Some are required while some are thrown in as extras.
Different words of advice are also given, like increasing your deductibles and reducing your liability coverage which may be risky. All in all, here are the different types of coverage you absolutely need.
For starters, most states require bodily injury liability, which awards the driver of other cars and passengers with money in the event if an accident. In addition, it covers the passengers in your car. This is the most basic type of coverage and helps prevent against lawsuits, even if the accident wasn’t caused by you directly.
Bodily injury liability is sold in different increments depending on per person and limit per accident. Up to $300,000 may be awarded if you have enough assets to justify that expense, such as $20,000 worth of stocks and a $500,000 house. If you’re poorer, coverage in the $50,000 should be enough.
Property damage liability is the next type of coverage to consider. This pays for the repair of the other person’s vehicle in case of an accident. Many states require as low as $5000, but you might run the risk of totaling a Porsche on the road which may require coverage starting at $50,000 and up. A minimum of $50,000 should be enough with $100,000 as a good cap.
In the hierarchy of insurance coverage, personal injury protection is one of the least considered because separate health and life policies can pay for the medical and funeral costs associated with an accident.
Check with your health plan first. Uninsured or underinsured motorist protection is slightly above, considering the past there are tons of uninsured drivers in the country. This pays for medical costs in the event the guilty driver cannot pay. Collision and comprehensive coverage should be reserved to newer cars.