There are different types of coverage when it comes to auto insurance policy. They are specifically designed to address the different and growing needs of the consumers.
There is Financial Responsibility Limit set by every state. This is the minimum amount of coverage car owners and drivers must possess as mandated by the law. However consumers are still given liberty to go beyond this but not below it otherwise one will be underinsured. That is why there are varying types of car insurance policy so people can choose depending on their needs and requirements.
Some coverage will protect you from paying the damages an accident of your fault caused, this is the Liability Insurance. Collision and Comprehensive Insurance will take care of your car for any damages regardless if you are at fault or not. The former, deals with accident while the later covers damages caused by fire, vandalism, windstorm and the like. Protection against uninsured drivers or underinsured motorists are provided for by coverage such as Uninsured/Underinsured Motorist (UM/UIM) and Uninsured/Underinsured Motorist Property damages. There are also coverage which focuses on covering medical fees and related expenses in cases of accidents such as Physical Injury Protection and medical Payment Coverage.
There are more varieties of car insurance policy coverage however getting all of them may not be necessary. One consideration that would help you decide what coverage to take is the type of car you will be driving.
Driving used cars would not make you exempted from availing auto insurance policy nevertheless it can provide you a lower rate than if you will use a new vehicle.
What insurance coverage to get when you will be driving a used car? First consider how old your car is and research on what is its current actual value. If your car’s value is less than what your policy would cost you, you may consider reducing your coverage.
You do not have to avail all the insurance coverage just because they exist. Consider for instance your Collision and Comprehensive Coverage. This two can mostly be found in package together although they are pretty standard one can still go without these two. For old car you can actually just drop or lower Comprehensive or Collision Insurance if you will pay more for them than what you will get in case your old ride is totaled.
Liability insurance may tend to be just as needed by old cars as new cars do. Used car can cause as much damage to structures or other cars so this coverage appears to be needed even by your old buddy.
Paying higher insurance deductible also makes sense for old cars since this may lower your premium rate.