Every state law requires motorists to have some kind of basic auto insurance cover. However, you must understand that you don’t have to purchase just what the state laws prescribe. In fact, you can always purchase additional insurance cover over and above what the state requires. This way you will get better protection in the event of an accident.
First of all, you must understand the guidelines prescribed by the state very clearly. At least 47 states in the US require you to purchase the liability coverage. This coverage pays for bodily injury as well as damage to property irrespective of who is at fault. There are another 15 states that require the motorists to purchase the PIP coverage also. This helps pay for the medical expenses, lost wages etc., in case of an accident. The minimum coverage that you will need would be as per the state law but it is advisable to purchase extra cover always.
There are a variety of auto insurance options but you will have to ascertain what you would require. Various components such as gap insurance, extended warranty to cover costs of labor and parts if there is a breakdown, coverage for a rental car in case your car is involved in a crash, etc.
Be sure about how much you can afford to spend in case you are involved in an accident. For instance, if you have only the minimum liability cover and you happen to cause some injuries to someone, then you could get sued and they can attach it to your personal assets. So, ensure that you calculate your assets and what you could afford to lose in case you meet with an accident. Most insurers feel that the minimum liability is more of a gamble. Hence it makes sense to pay a little more in order to get better protection. It makes sense to let the insurance company pay instead of you paying out of your pocket.
In case your vehicle is totaled will you be able to replace it? If the answer is no, then you should ideally be taking a comprehensive insurance cover as well as the collision coverage. Collision coverage should be purchased after determining the value of the car. If you have a car that is worth more than $50,000 then it makes sense to pay another $200 each year so you have better protection. So, know all these facts before purchasing auto insurance.
