A growing number of people are dropping their car insurance to try to save money, according to a recent study by the Insurance Research Council. However, dropping insurance coverages could result to a problem in the future.
Many companies offer different insurance coverages in order to have better protection while driving a car. The following are the basic coverages which can be beneficial when purchased.
Liability Coverage provides protection if a driver injures, kills someone or destroys other’s property while driving his or her car. Complaints usually come out when medical treatments and property damages are not fully paid by the driver. This then provides for a legal defense if another party in the accident files a lawsuit against you. This does not cover property damages or physical injuries to the driver at fault.
Medical Payments Coverage or Personal Injury Protection Coverage pays for damages sustained to the insured and his or her passengers without regard to fault. Also it pays for damages suffered by the insured and covered family members for injuries sustained at the hands of non-exempt vehicles even when victim is outside of the car. If you have a decent health insurance plan, you might get away with purchasing the bare minimum personal injury protection coverage- or none at all if your state doesn’t require it. However, you might end up paying co-pay and deductible that wouldn’t apply if you have Medical Payments Coverage or Personal Injury Protection Coverage.
Collision Coverage pays for the damages the car acquired from collision with another car, or resulting from malfunctioning infrastructure. In case the driver’s actions were the cause of the accident, the collision coverage will reimburse the costs of the car repair with the subtraction of the deductible. If not, you are likely to be also paid from the deductible in case your company succeeds in covering your costs from the other driver’s insurance
Comprehensive Coverage covers the driver’s vehicle and the other vehicles he is driving for losses resulting from incidents other than collision. For example, damage to stolen car, damaged by flood, fire and animals.
Uninsured and Underinsured Motorist Coverage covers the driver, the insured members of the household and his/her passengers for bodily/personal injuries, damages or death caused by an at fault driver who is uninsured or underinsured.
Before you purchase any type of auto insurance coverage, be sure to study your other insurance policies so you don’t end up paying for something you don’t need.