Driving is a privilege, not a right. All states require liability auto collision insurance. There are many insurance companies that provide different types of coverage, depending on what vehicle you use, the purpose of the vehicle, and the amount you wish them to pay in case you get into an accident. These factors can have an impact on the cost of insurance. They may also be affected by driver’s age, driving record, and where the vehicle will be used. In return for an agreement where the company agrees to pay money to fix your vehicle, other people’s property, medical bills, or any other matter that has been agreed upon, all companies charge drivers either a monthly or premium fee. The deductible is a one-time payment that the insured must pay in case of an accident. No matter how much insurance company spends to repair damages caused by an accident, this payment will not change.
Types of Coverage It is illegal to drive in any U.S. state without insurance. Basic liability coverage will permit you to drive your vehicle legally. It will also cover you for monetary damages up to a certain amount in the case you are involved in an accident with another vehicle, person or thing. However, this coverage may not include the cost of fixing your car.
Comprehensive and collision is the next level of basic liability coverage. Also known as “full coverage”, This agreement generally states that your insurance company will pay a predetermined amount to cover certain types of accidents, and also repair your car. This type of agreement has a deductible. The insured must pay a deductible, which is a one-time or partial payment for the total damages. Deductibles range from 100 to 500 dollars. Although insurance companies often allow customers to choose the deductible that they want when they purchase a policy, you will likely pay more monthly fees or premiums if you have a lower one.
Which Type is Right for You?
In the event of an accident, insurance companies will set predetermined amounts they will pay. The most common thresholds are 20,000 for property damage and 100,000 for medical. You can change these values with certain companies, but your premiums could go up or down depending upon how much coverage you need. It is a good idea to have full coverage if your car is brand new. Most companies will cover the fair market value of the car if it is damaged in an accident. The insured would not receive any money for the repair of the vehicle if they only purchased basic liability coverage. Many lien holders, lenders, and banks that loan money to buy the car require that the insured has full coverage. It is a good idea to get only basic liability coverage if you have a junker or less-expensive car. The majority of damage to cars can be costly to repair and it makes no sense to pay more for full coverage if the company considers it a total loss.
Owning a car is an important responsibility. If someone drove without insurance and hit something, they would not be able to get their vehicle fixed, receive high-cost medical attention, or repair their property. Accidents can happen regardless of our intentions. Having the right insurance type and amount can make the difference between having your vehicle repaired or getting a major problem that could lead to civil or criminal penalties.
