Are you thinking about buying your first car? If so, the kind of vehicle you purchase isn’t the only investment you will have to make. Instead, you must also get car insurance as well.
Why you need car insurance?
Do you think you are better off without car insurance? Well, think again. In the US alone, approximately 750,000 vehicles get stolen every year! Not to mention the number of car accidents that occur all over the world. Again, merely in the US, approximately 6 million crashes occur. Regardless of where you are, the stats would still signify the potential loss that you will have to bear if you don’t ensure your car.
Additionally, in almost every country, driving an uninsured is the car is considered to be illegal. While some countries fine you for it, others might even nullify your driving license.
So, whenever you are wondering, “when will I have enough money to buy my car?, do take into account the amount you would need for insurance.
Types of car insurance
There are different types of car insurances out there. Selecting the best one requires you to know what each of them covers.
- Liability Insurance
Liability insurance covers the expenses you might do to other vehicles or someone else’s property while driving. For instance, if an accident is your fault, you are liable to pay for the damages caused, both medical and physical damages to the car. Your liability insurance will cover these expenses. The law requires you to have some liability insurance.
There are three things covered by liability insurance.
- A maximum amount per injury per person
- A maximum total amount for all the injuries
- A maximum about for property damage
So, if liability insurance says “20/35/15”, then this means:
- A maximum of $20,000 per injury
- A total of $35000 for total injuries
- A total of $15000 for property damage
- Full coverage
Full or comprehensive coverage is an insurance option that provides coverage against many instances. This includes glass breakage, theft, fire, vandalism, and weather. Generally, you will be required to pay a deductible for the expenses before your insurer pays.
For instance, let’s say your car gets vandalized. The expense of the repair is equal to $3000. You will have to pay $300, and the insurer will pay the remaining $2700. In most cases, you get to decide how much deductible you would be paying.
- Collision coverage
When you get into an accident and have collision coverage, you can make a claim that would make your insurance company pay for the cost of repairing your car. Let’s say your car is totalled beyond repair; then the insurance company pays you the market value of your vehicle.
- Personal injury coverage
Car accidents aren’t just unfortunate for the car. Instead, a lot of people die and are injured in accidents. The medical bills in such cases can be crippling. This is when a personal injury coverage becomes helpful. It covers your medical bills in case of accidents.
While there are many other types of insurance for cars, these are the four most important ones. Make sure you get them all to avoid bearing burdensome expenses if things go south.
About Michelle Joe: Michelle Joe is a blogger by choice. She loves to discover the world around her.
She likes to share her discoveries, experiences, and express herself through her blogs. You can find her on twitter: @michellejoe524