How Much Insurance Coverage Do I Need For My Car?

The amount of car insurance you need depends on many factors including the type of car you own, where you live, and what the car is used for. It's difficult to say what insurance would be the best policy for everyone, as every situation is unique. But, here are the different types of insurance available and how they might be useful to you.

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Liability Coverage

Liability covers the expenses incurred when you’re at fault during an accident. If the police determine the accident could’ve been prevented, you’ll likely be held responsible for all damages to your vehicle and the other drivers’ along with possible medical expenses. Liability coverage helps ensure you can pay for the damage to the other driver’s car and the hospital bills they might incur.

State law often requires drivers maintain some form of liability coverage. It’s important to know the difference between bodily injury liability and property damage liability. Both are considered necessary forms of coverage, in most cases.

Bodily Injury Liability (BIL)

Bodily injury liability provides coverage in the event you cause an accident in which someone is injured. Injured parties can include other drivers, passengers or pedestrians. BIL only covers the medical expenses of injured parties involved in an accident in which you’re at fault.

BIL policies are typically 100/300 policies and have a set amount of how much they’ll pay for a person’s injuries. If your coverage is 100/300 your insurance company with pay a $100,000 maximum per person for medical expenses and $300,000 in total for all injured parties involved.

You may also find policies with lower numbers like 20/50 or 50/100. These will pay $20,000 per person and $50,000 max or $50,000 per person at $100,000 max, respectively.

BIL can help you from losing your assets. It’s important to consider the value of your other property when choosing the amount of your BIL coverage, otherwise they could be used to cover expenses that exceed your BIL limit.

BIL is required in most states.

Property Damage Liability

Property damage liability covers the other parties’ vehicles in accidents where you’re at fault. If the other driver’s car is damaged or totaled you are responsible for fixing or replacing that vehicle. It may also provide coverage for other types of property you damage in the accident.

Property damage liability is often less than bodily injury liability. You may see it as a third number alongside your bodily injury coverage. For example, a 50/100/20 policy would be $50,000 for injury per person, $100,000 for medical expenses in total and $20,000 for damage to the other driver’s vehicle or property.

If the amount of damage exceeds the maximum coverage on your liability policy you will be responsible for covering what’s left over.

States generally require property damage liability to be included in your liability insurance coverage. Specific requirements vary by state.

Personal Injury Protection (PIP)

Personal injury protection is also known as “no-fault coverage.” It pays for your personal injuries in an accident even if you’re at fault. It also covers the costs of injuries to your passengers.

PIP covers things like hospital bills, in-home services related to your injuries, medical prescriptions and rehabilitation. It might also cover lost wages due to injury or funeral expenses.

PIP is only available in no-fault states and is often required.

Medical Payments Coverage

Medical payments coverage works as an alternative or accessory to personal injury protection. It only takes effect when you exceed your regular health insurance limits.

Coverage includes medical and funeral costs. It can also cover you if you’re a passenger in someone else’s car or if you’re struck by another vehicle while walking or riding a bike. Coverage also extends to passengers in your car.

Comprehensive Insurance

Comprehensive Insurance covers situations outside of vehicular accidents. It covers you in the event your car is damaged by weather, stolen, or if you have a collision with an animal. It may also cover fire, vandalism and damage caused by civil disturbances such as riots.

Comprehensive is usually optional, although it may be required in some states if you lease or have a loan on your car. The age of your car and its value should be considered when deciding whether or not to purchase comprehensive coverage. The deductible for comprehensive insurance could end up totaling more than the value of your car. Comprehensive coverage is considered ideal for newer cars.

Let Obrella help you decide whether or not comprehensive coverage would work for you.

Collision Insurance

Collision insurance covers damage to your own vehicle in the event of an accident. Whereas liability only covers damages to the other driver’s vehicle, collision coverage will allow your insurance to pay for repairs to your own car. If your car is totaled in an accident, your insurance provider will pay you the total value of your car equal to the sum of the car’s market value prior to the accident.

It can also cover damages to your car that do not occur in car-on-car accidents. For instance, if you lose control of your vehicle due to hydroplaning or black ice and run off the road, collision insurance can help cover damages incurred.

Some states require collision insurance. Many insurance companies view collision insurance as a good idea for newer cars.

The amount of car insurance you need depends on many factors including the type of car you own, where you live, and what the car is used for.

Uninsured/Underinsured Motorist Coverage

Many drivers don’t have the maximum insurance available on their vehicles. Uninsured/Underinsured motorist coverage helps cover your expenses if someone with minimal or no insurance coverage hits you. Its purpose is to protect you from having to pay the bills for an accident that isn’t your fault.

Though illegal, there are many people on the road without insurance or not enough coverage leaving you open to incurring expensive repairs through no fault of your own.

If an uninsured driver is responsible for an accident you’re involved in the law requires that they pay out of pocket even if they don’t have coverage. However, if they have no money you could still get stuck paying the bill or be left without a car. Uninsured motorist coverage aims to prevent that from happening by paying for the cost of damages when you’re not at fault but cannot force the other driver to pay.

Roadside Protection

Roadside protection gives you a sense of peace knowing you’ll be covered if your car breaks down along the side of the road. Coverage varies but can include towing, tire changes, jump starts, removing your car from snow or the cost of having someone open your car in the event you’re locked out.

Towing Insurance

Towing insurance serves as an alternative to roadside protection and only covers the cost of towing and labor charges. It does not cover the cost of parts in the event they need replaced. However, It can pay for the labor incurred and time it takes to get your car up and running.

With towing insurance someone will come and tow your broken down vehicle to the nearest point of service or possibly a mechanic of your choice.

Towing insurance varies by state and is often included in comprehensive coverage plans.

Glass Insurance

Many insurance companies offer glass insurance. It covers only damage done to your car’s glass components. Coverage can include windshields, side and rear windows, sunroofs and possibly glass covering other parts of the car.

Repairs on glass cracks are minimal and can take as little as 30 minutes to repair in some instances. Other times glass insurance can replace entire windshields in the event they are shattered or cracked all the way across.

Every provider does not offer glass insurance. Check with Obrella to see if glass insurance is available, or necessary, for you.

Gap Insurance

Gap insurance is designed for drivers who still owe money on their cars. If you total your car in an accident and still owe money on the loan gap insurance will cover the gap between the estimated value of the car and how much you owe. Many insurance policies only cover the estimated value of the car before the accident.

Some providers may require you to purchase gap insurance with your policy.

How Much Insurance Do I Need for My Car?

Car insurance needs are specific to each case and your insurance needs will be different depending on a variety of factors. Some things to determine are the make and year of your car, where you live, how often you drive, and what insurance is available in your area.

Each state has specific rules and requirements when it comes to insurance so it’s important to know your local laws before making a purchase. If you have questions about your insurance needs or need help determining which policy is best for you, please give a licensed expert a call at 1-855-234-2253 today.

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