If you cause a car accident, you may be held responsible for costs associated with it. These may include legal fees, the injured person's medical expenses or their lost income if their injuries leave them unable to work. Liability coverage may help pay for these costs. Without liability coverage (or adequate liability limits), you would likely have to pay these costs out of your own pocket.
If you're financing or leasing your vehicle, your lender may require you to purchase collision coverage and comprehensive coverage. Since the lender or leasing agent is the lienholder of your vehicle while you're making payments, these two coverages may help protect their investment. Comprehensive or collision coverage may help pay to repair or replace the vehicle if it's damaged in a covered loss.
If you have gap insurance on your auto policy, this coverage helps pay off your car loan if the vehicle is totaled or stolen and you owe more than its depreciated value. Gap insurance is optional, and it typically works with collision and comprehensive coverage.
Even if you own your vehicle outright, you may want to have collision coverage and comprehensive coverage on your car insurance policy. While mandatory liability coverage helps pay for damage to another driver's vehicle, it's important to have coverage for your own vehicle. For example, what if your car is damaged in a hailstorm? Comprehensive coverage may help pay for repairs or replacement if your car is stolen or damaged by something other than a collision, such as falling objects or fire.
Or, say you accidentally hit a mailbox and damaged your car's front bumper. Collision coverage may help pay to repair your car if you hit another object or vehicle, regardless of fault.
Without comprehensive or collision coverage, you would have to use your own money to get your car fixed.
Medical payments coverage and personal injury protection may help pay for your medical bills if you're injured in an accident. It also may help cover your passengers' expenses due to the accident. This coverage may help pay for hospital visits, doctor bills and surgery.
Even though liability coverage is a legal requirement, many people drive without it. Uninsured motorist coverage may help pay for your medical bills if you're hit by a driver without insurance. This coverage is required in some states and optional in others.
Having the proper car insurance coverage in place can go beyond fulfilling a legal requirement. A car insurance policy may help protect your vehicle, your wallet and even offer peace of mind. Talk to a local agent, who can help you choose the coverage that's right for your needs.
