Car insurance can seem like an unnecessary expense, but it’s actually an essential part of being a safe driver. After all, if you’re in an accident, you don’t want to find yourself out thousands of dollars in repairs and unable to go back to work because your car is in the shop. Here are three types of car insurance that every driver should have on their policy.
1) Liability Coverage
If you cause an accident and injure or kill someone, liability coverage can protect you from legal repercussions, including lawsuits. It will help cover your medical expenses and pay for repairs to other cars or property that are damaged in an accident.
Liability insurance is required by law for all drivers in certain states but optional in others; it’s best to check with your state’s Department of Motor Vehicles (DMV) before ditching it.
2) Collision Coverage
Collision coverage will repair or replace your car if it’s damaged in an accident with another car, truck, or object. However, collision coverage doesn’t protect you from certain problems, such as damage caused by floods and earthquakes.
Collision coverage is sometimes optional in states that have adopted no-fault auto insurance laws; in these states, personal injury protection benefits may cover your vehicle following an accident. In addition to protecting against collisions with other vehicles and objects on roadways, collision insurance covers you.
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If you hit a pedestrian while driving, your collision coverage would pay for any damages done to your car—as well as any medical bills incurred by the injured pedestrian. If someone hits you while driving, their liability insurance would pay for repairs or replacement costs.
3) Comprehensive Coverage
Comprehensive coverage pays for damage to your car not caused by a collision, like weather damage or vandalism. The downside is that it’s costly, and many people have been lulled into assuming they don’t need it because they haven’t had an accident in years.
It’s worth checking with your agent to see if you should consider dropping it — unless you have something valuable in your car (like a vintage Corvette), you probably don’t need comprehensive coverage. If you do choose to keep it, ask about raising your deductible. In most cases, raising your deductible from $250 to $500 will lower your premium by 10 percent or more.
A few dollars per month can save you thousands on insurance over time.