February 21

Protect Your Vehicle With the Right Insurance Coverage

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Car Insurance Tips in Plano, TXWhether to insure or not insure is a good question without an easy answer. Variables such as whether coverage is mandatory where you live, whether you have health insurance, and what the value of your car should all be considered. To make things even more complex, many different types of vehicle insurances are available. Here’s a list of the most basic types of coverage.

Auto Liability Coverage

This kind of insurance is a legal requirement for car owners in most parts of the U.S. It provides coverage for bodily injuries and damage to property incurred if you cause an accident. If you decide to invest in this coverage and how much you invest depends on whether it’s mandatory in the state where you live, and if so, what the required minimum amount of coverage is.
It is, however, advisable to aim for as high a limit as you can afford. If your coverage isn’t enough, you’ll likely have to foot the bill for the outstanding amount.

Comprehensive and Collision Coverage

If you’re leasing a vehicle or have a car loan, you must have comprehensive and collision coverage. The former will pay out in the event of non-accident-related events, such as floods or hail storms, whereas the latter will cover damages to your vehicle in the event of an accident. Whether to opt for this kind of insurance if you have a second-hand car depends on the vehicle’s value. If the annual cost of the insurance is more than 10 percent of car’s current value, it’s better to save your money.

Personal Injury Protection (PIP) and Medical Payments Coverage

Depending on which state you live in, you may also require personal injury protection coverage. Basically, this pays out when you, or a family member, is injured in an accident. Many people, however, who already are covered by health insurance, opt not to go for PIP if it isn’t a legal requirement.
Medical payments coverage basically functions as added protection, as it will cover part of, or all, of the remaining expenses not covered by PIP. However, if your PIP is comprehensive or you have good health insurance, this coverage may not be necessary.

Gap Insurance

The value of your car when it’s stolen or totaled may be less — because of depreciation over the years — than the balance of your loan or lease. As your insurance company will only pay you the amount that your car is worth at the time of the accident, gap insurance steps in to cover the difference.

Uninsured and Underinsured Motorist Insurance

This kind of insurance will cover you for personal injuries or vehicle damages in the event of an accident caused by a person who is not insured or is underinsured. If you have spare cash lying around, this kind of coverage is definitely worth it.
Whether you should take out car insurance, and which kind, depends on your unique situation. If you’re legally bound to do so, there’s no choice. But if you’re not, it may still be a good idea to invest in insurance if you have the means. Otherwise, accident-related expenses could cost you much more.
 
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