Every car owner has to carry a minimal coverage insurance policy on the vehicle that they drive, and this coverage varies depending on what state you live in. While purchasing the minimum insurance will make your car legal to drive, understanding the types of additional insurance you can purchase can make a big difference if you are in a car accident. In general, the more expensive your car is and the more you owe on it, the more additional insurance you should carry to protect yourself.
GAP Auto Insurance to Protect Against a Total Loss of Your Vehicle
If you have a new car, the minute you drive it off the lot the value will decrease. Guaranteed Auto Protection (GAP) insurance is a way to protect you if your car becomes totaled and you need to purchase a new vehicle. With GAP insurance, you will receive money that covers the gap between what your car is worth and what you owe on your car. For example, if you total your car and it has a book value of $15,000, traditional car insurance will pay you $15,000. It doesn't matter if you owe $17,000 on the car, you will still have to pay $2,000 to your lender. If you have GAP insurance, the total cost of the car is covered and you won't have to worry about paying any extra money in.
Rental Car Coverage
If you are a frequent traveler, you can add rental car coverage to your traditional auto insurance policy for a small fee. While many drivers believe that they are covered and don't need rental car insurance, you should double check your policy to make sure you will be covered in the event you are driving a rental car and you get into a car accident.
Optional Additional Collision Coverage
Many people that own an older vehicle decide to drop their collision coverage. This is coverage for damages to your car, and will pay you what your car is worth if your car gets totaled. The reason some people drop this coverage is that their car has such a low book value, that keeping the coverage is more expensive than any money they would recover if their car was totaled.
You can purchase insurance for physical property damage, to cover property that was ruined because of a car accident, and even additional coverage to pay for any damages if you hurt another driver. When you need a new auto insurance policy and you aren't sure what you want, ask for an auto insurance quote from a company like Montana First Insurance Inc. today.