Next to purchasing a house, purchasing a car is easily one of the biggest financial decisions that you’ll ever make in your life.
That’s why people typically spend a lot of time test driving different models, figuring out their budget, and considering the different modes of car ownership. You can buy new, buy second-hand, or lease a car.
Another decision that is as important as purchasing the car itself is which type of auto insurance you should get.
In this article, we’ll provide you with a comprehensive guide on auto insurance types so that you are able to purchase the plan that’s right for you.
Liability Coverage is Mandatory
First up is liability coverage. Liability coverage is the primary auto insurance type that is mandatory in every state. You must have liability coverage in order to be able to legally drive the vehicle that you bought home.
Liability coverage is what it sounds like — it covers the accident and expenses of the other motorist when you are liable for a wreck.
If the accident was your fault, then liability coverage is there to save you.
Consider Uninsured/Underinsured Coverage
There’s a good chance that you won’t be at fault in whatever accident you’re in, especially if you’re a good driver. In those situations, the liability falls on the other motorist to make reparations for damages.
However, if that motorist was either illegally insured or underinsured, then you might be out of luck if you don’t have uninsured/underinsured coverage.
This policy type will pick up the slack when the motorist who hit you doesn’t have enough coverage to right his or her wrongs.
Comprehensive Coverage Saves You in Many Situations
Comprehensive coverage has to do with protection from theft and natural disasters.
If your car is frequently parked in a public place and is susceptible to being stolen, then you want to consider comprehensive coverage so that you never have to replace a stolen car out of pocket.
In addition, if you live in a location that is frequently subject to tornadoes, hurricanes, or hailstorms, then comprehensive coverage will pay for damage done to your vehicle by those storms.
Personal Injury Insurance is a Good Option
Last but not least, we have personal injury insurance.
This type of insurance goes beyond the expenses of repairing the damage done to the vehicles involved in the wreck. It includes compensation for medical bills that result from injuries during the crash.
Read this guide to personal injury insurance for more detail.
Understand All Auto Insurance Types
Now you have a good understanding of the different auto insurance types. You’re ready to figure out which type of coverage makes sense for you and your vehicle.
Do you have more questions? For more legal advice, be sure to take some time to browse through the rest of the articles on the website!