There are a few vehicle insurance coverage options to provide for third parties in case you injure or cause them damages, pay for your and your family’s injuries and damages to your vehicles as well as offering various financial assistance and help. Some of these cannot be avoided like minimum liability coverage required for virtually every vehicle owner and others are optional.
Nobody likes to spend money on car insurance coverages they don’t need. So, here are the commonly available vehicle insurance options to see if you need them by law, contractually and financially or you can avoid buying them to save money;
- Liability
Every vehicle owner must buy liability auto insurance to comply with their states’ minimum requirements. This coverage pays for any injuries and damages you may cause to other people in an accident you are at fault. There is no avoiding liability coverage as there are severe penalties and compliance is strictly checked.
Not only must you buy liability coverage but also you may need to consider increasing the levels of protections since state minimums are set very low to make it affordable for everyone. Most companies may already offer policies with higher liability limits and you may want to choose them or increase lower levels offered.
- Comprehensive
Comprehensive coverage is bought to protect your own car against theft, vandalism, fire and weather related losses.
- Collision
Collision coverage pays for damages to your own automobile if it needs to be repaired or replaced after a collision regardless of who is at fault.
Collision and Comprehensive covers are usually sold together and you probably need them if you have a fairly new automobile. You invested a lot of money for it and you want to be protected if something happens to it. They are normally required by your lender or lessor if you have a loan on the vehicle or you leased it.
However, Collision and Comprehensive coverages together can cost you $1,392 extra on top of your liability coverage, on average. If you have a fairly old automobile you may not get your money’s worth considering both of them come with deductibles as well. Most people would avoid these two car insurance coverages, if their auto is around 10 years old or worth around $5,000 or less and they have enough savings in the bank to buy another vehicle if they have to. Some people may already have another vehicle anyway.
- Uninsured/Underinsured Motorists Coverage
This coverage pays your and your passengers’ injuries and your vehicle damages if you are hit by an uninsured driver. This is required by 22 states as part of minimum coverage. Otherwise, it is good coverage to arrange, especially in states with a high number of insured motorists.
If it isn’t required by your state and you have personal injury protection or other health insurance coverage to pay for your injuries, you may not need it. If you have collision coverage you won’t probably need uninsured motorist property damage as collision can pay for damages to your vehicle.
- Personal Injury Protection
In 12 no-fault states, PIP coverage will deal with your and your passengers’ injuries and pay for other losses like lost wages. If you don’t live in a no-fault state, you don’t have to have this coverage. If you have good health insurance for yourself and your family, you don’t need to pay twice for similar coverage and you can avoid it.
- Medical Payments
Medical payments coverage required in two states. Otherwise, it has similar coverage as PIP and the same rules apply.
- Rental Car Reimbursement
This coverage pays for rental cars if your auto is being repaired by insurance. It isn’t cheap coverage and you can spend hundreds of dollars needlessly if you don’t make a claim. If you have good public transport in your town, you can get lifts from friends and family or have a second car, you don’t need it.
- Roadside Assistance
Roadside assistance from insurance companies is generally fairly cheap at around $15 but you don’t need this coverage if you already have a recovery service membership.
- GAP Insurance
GAP insurance is for people with a car loan. It pays the outstanding loan amount if what is paid by your insurance company isn’t enough. First of all, you shouldn’t buy this coverage from your dealer as it is cheaper to buy it from an insurance company. You don’t need this coverage at all if you don’t have a loan and you can drop it as soon as your loan is paid.
- Custom Parts and Equipment Coverage
You can avoid this vehicle insurance coverage if you haven’t done any modifications to your automobile. It isn’t normally needed.
People buy automobile insurance to be protected in case of accidents and losses that will cause them financial stress. A full coverage with Liability, Collision and Comprehensive usually takes care of most of the large losses you may suffer. You need to consider each coverage carefully and decide if you can manage on your own without it.
There are so many options in the market today that it is necessary to decide which vehicle insurance coverages you can avoid. Once you determine the coverage you need, you should always shop around to find the cheapest insurer to help you keep the costs under control.