If you are like most people, you already have car insurance but you are not sure what your car insurance covers. You know that you legally have to have car insurance to drive your car, but you bought your insurance without knowing what type of car insurance you need. If you have a car loan, then you must have both liability and collision coverage for your vehicle. Most states require a minimum amount of liability insurance for any vehicle that will be driven on public roadways.
Liability insurance can be purchased solely in order to meet the state minimum requirements. However, if you have any assets or if you drive an expensive vehicle, you may want to consider buying more liability insurance. You can look at the declarations page of your insurance policy to find out how much liability coverage you have. The limits will show how much someone will be paid if you are found responsible for an accident. If you are not sure about what type of car insurance you need, you might want to speak to a licensed insurance agent who should assess your insurance needs and then make a recommendation for you.
Collision coverage is what will help you repair your vehicle in the event of an accident. This type of coverage is optional if there is no loan against your vehicle. Most banks will require that you carry collision coverage for a vehicle in which there is an active loan. Before you determine what type of car insurance you need, you should assess the value of your vehicle. When your vehicle is about ten years old, you can consider dropping collision coverage, but you should speak to an agent before you decide to do that.
Comprehensive coverage is also optional coverage unless there is a loan against your vehicle. If you are thinking about what type of insurance you need, think about the expense of repairing your vehicle. Comprehensive coverage is usually a lot less expensive than collision, and can help you if any glass on your vehicle needs repair. Most insurance companies will issue a policy for comprehensive coverage only if you buy collision coverage and liability coverage. It is important to make sure that you have the right amount insurance coverage. You want to consider how much it costs to repair or replace a vehicle today, and you should also think about how expensive medical treatment is when you are buying car insurance.