Whether your first car is a graduation gift or you are purchasing a vehicle for your first job, one thing is for sure: you must have car insurance on your vehicle. If you have never purchased insurance before, finding the right coverage can be intimidating. According to the Department of Motor Vehicles, here are the most common types of insurance coverages in a typical auto policy.
Liability insurance is required by most states for operating motor vehicles. This coverage does not protect you or your vehicle, but instead insures that other motorists are covered in the event that they (bodily injury) or their vehicle (property damage) are harmed in an accident that you are involved in.
Collision and Comprehensive
Unless required by your lease or loan agreement, collision and comprehensive insurance is an optional coverage. However, purchasing this coverage is smart, since it protects your vehicle from damage caused not only in an accident, but also from events such as animal collisions (like deer), inclement weather (like hail), and theft. Discuss the cost and advantages of this coverage with your independent agent to determine if it would be a beneficial addition to your policy.
Underinsured and Uninsured Coverage
You have probably heard the expression, "It's not you I'm worried about; it's the other drivers that worry me." Well, your car insurance company feels the same way. Even though you may have insurance, the person you are involved in an accident with may not have insurance on their vehicle at all (even though it's legally required), or may not have enough insurance to cover the total cost of property damage and medical expenses that were incurred as a result of the accident. That could leave you footing the bill or fighting with attorneys for damages and medical expenses. This coverage provides financial assistance in the event that you are involved in an accident with someone who is either uninsured or underinsured.
Personal Injury Protection
Personal Injury Protection (also referred to as PIP or no-fault insurance) is designed to financially assist with medical expenses accrued due to an accident. While this coverage is not required in every state, it can prove invaluable, especially with the rising costs of medical procedures and services.