Auto insurance is mandatory in most states, however, there are some states that have easier “proof of financial responsibility laws” to allow you to get around that. These laws make auto insurance recommended, rather than mandatory. However, if you want to protect your finances, it is smart to at least get liability insurance. Liability insurance, as well as collision insurance, protects your finances in the case you have an accident. This insurance will either pay for your own car repairs or those of the other party. It will also replace a vehicle if it is considered “totaled” by the insurance company.
The key is to look at your insurance policy. On the declarations page, you should find your coverage limits and what is covered by the insurance policy. This ensures that you are fully informed about what type of coverage you have bought, as well as what the deductible is and the payout limits are.
Basically there are two types of auto insurance. Liability is the first and most important type, as it offers coverage that normally complies with the state minimums. It will cover you if you are at fault in an accident. The second type is known as comprehensive or collision insurance and it offers additional coverage, including car repairs, no matter who is at fault and personal item reimbursement if they are lost or damaged.
If you feel as if you need a higher coverage limit or different policies added to the original coverage, there are many add-on policies that you can choose from. While these cost more, they can give you peace of mind in knowing you are completely covered. One of these add-on coverage options is medical coverage that helps with paying hospital bills in the case of an accident, but there are others, including rental insurance, that are available.
The great thing about car insurance is that the cost to you will not be as high if you are in an accident that causes damage or loss to your car. Lost wages can be recovered and even damage from an event that was not a collision can be covered with a more comprehensive policy. This protects your finances now and in the future.
By contacting your local insurance agent, you can be sure that you get car insurance that will fit your budget and your particular needs. This will allow you to drive without worry, in knowing that you are covered in the case of an accident.