When a vehicle is purchased, it is necessary to purchase car insurance. There are many different types of insurance, and the types you include in your policy will depend a great deal on the car you purchase. In addition, some types of coverage are required by law or by the lending institution you are financing the car through, while others are optional.
Liability insurance is required in nearly every state in the union. This covers costs incurred by the other party if you are responsible for an accident that causes property damage to their vehicle or bodily injury to the other person. In other words, their medical bills and car repair bills will be covered up to the limits of your policy.
Comprehensive and Collision
These coverage types are usually mandatory if you are financing the vehicle but are optional if you pay cash for it. Lending institutions want to be sure that the vehicle can be repaired if it is damaged and require coverage if you want to get the loan.
Uninsured and Underinsured Motorist
Most states require this type of coverage. It is designed to pay your costs if the person who causes property damage or injury to you in an accident does not have enough coverage to pay for all of your expenses. People with expensive vehicles should have this coverage.
There are many other options when it comes to coverage types. Working with a knowledgeable car insurance agent is the best way to get the proper coverage for your needs and to select adequate limits on each type of coverage.