Your Insurance Guide For Protecting Your Vehicle

Robin Wells

Owning a vehicle takes more than just keeping it filled with gasoline or charged with power. Most states require you to have some form of auto insurance in case of an accident. If you would like to know more, keep reading.

Liability Insurance Is Usually Required

In most states, drivers are legally required to purchase and maintain a liability auto insurance policy. If you are caught driving without insurance in these states (even if no accident has occurred), you may be fined, receive a suspension, or be required to submit proof of insurance to the department of transportation in your state (SR-22 insurance).

If you cause an accident, liability insurance covers the medical bills and damages to the other drivers. It does not cover your injuries or damages. If you don't have liability insurance, you may be responsible to pay a settlement out of pocket.

You Need Collision and Comprehensive for Full Coverage

If you want full coverage, you'll need to opt for collision and comprehensive coverage. Collision insurance covers your vehicle if you cause an accident. Comprehensive insurance also covers your vehicle, but it covers non-collision damage like vandalism or fire.

Many lenders require you to have collision or comprehensive insurance while you repay the auto loan. Once the loan is fully repaid, you have the freedom to drop collision and comprehensive, but you'll still need liability, and you'll lose all the perks that come with full coverage.

If you get injured in an accident you caused, you can use your medical insurance, but you may want to purchase a medical pay policy. This may have better coverage for your collision-related injuries. For example, you may have coverage for chiropractic care and have your copayment waived. On the downside, the limits for medical pay coverage are usually low.

Other Insurance Options May Be Appropriate

There are other types of auto insurance you may want to consider. These include:

  • Uninsured motorist insurance protects you against hit-and-runs and drivers with inadequate insurance.
  • Underinsured motorist insurance is like uninsured and offers money if the other driver carries minimal liability insurance.
  • Gap insurance helps fight depreciation by filling in the gap between the value of the car and the cost of the loan.
  • Labor and towing insurance makes a comprehensive policy more robust by reimbursing for some tow and labor costs.
  • Classic car insurance is a must for anyone who has a classic or vintage car.

If you drive, you need auto insurance, and full coverage is the best way to fully protect your finances. In some cases, you may need multiple types of polices to get the coverage you need. For more information on full coverage car insurance, contact a professional near you.