When it comes to auto insurance, it’s ultimately your responsibility to ensure you are protected at all time. There are several types of insurance policies to consider when you own or lease a vehicle. Always keep in mind that one policy may not be enough to cover all your specific needs. You may be required to look at an additional policy to avoid any major financial setbacks.
Here’s an easy list of the top policies you absolutely have to consider when you own a vehicle:
Liability insurance is a standard element of most auto insurance policies. This policy is a legal requirement in all states and will protect the driver of a vehicle in the event of any damage or injury they may have caused. This policy will protect the insured party when he or she ends up in a lawsuit arising from claims and will have to foot the medical bills or repair costs owed to a third party.
Personal Injury Protection (PIP)
Even though this is not a requirement in most states, it is still highly recommended that drivers have PIP. Should you ever be involved in an accident, the insured party can collect maximum benefits like medical bills and loss of income. PIP will pay out whether the accident was the fault of the policyholder or not.
Underinsured and Uninsured Motorist Cover
Roughly 1 in every 8 drivers not insured. Should you ever be involved in an accident with a driver who caused the accident and they are also uninsured, this type of policy will have you covered. UM and UIM will pay for your medical bills when the other driver has no insurance, or their insurance does not have adequate liability coverage to pay for your medical bills.
Collision coverage will pay for damages caused by an accident with another vehicle, or objects such as trees, street lights, telephone poles, or guard rails. Although it is not a requirement in most states, this type of coverage will still be required by your lender.
Should your vehicle be damaged by a collision, natural disasters, theft, or vandalism, you will be protected under comprehensive insurance cover. Comprehensive cover is not required in all states but it may be required by your lender. It might not make sense, however, if you have an older vehicle because the premiums and deductibles may not make financial sense. Always do your research from reputable sources such as online banking information guide.
Towing and Roadside Assistance
This type of coverage can come in very handy when you have an emergency breakdown. This policy will help you to get some roadside assistance alongside the cost of towing in the vehicle and rental of a new vehicle. It does have its limits, however, and it will not cover for any replacement parts.
As soon as you drive your new vehicle out of the lot, it loses value. This means that there’s a period where the value of the car is less than the actual loan amount. If you are in an accident during this period, GAP cover will pay out the difference between the actual value of the vehicle versus the total loan amount still outstanding.