Are you confused about the different types of car insurance? In this article, we break down the three main types: liability, collision, and comprehensive. Liability insurance covers damages or injuries caused to others, while collision insurance covers damages to your car, regardless of fault. Comprehensive insurance covers non-accident-related damages or losses. We'll help you choose the right policy for your needs by providing details on coverage and costs.
Don't wait until it's too late - review your policy now and update if necessary to ensure you're fully protected. Drive safe, drive insured.
Takeaways:
There are three main types of car insurance: liability, collision, and comprehensive.
Liability insurance is required in most states and covers damages or injuries you cause to others.
Collision insurance covers damages to your car, regardless of who is at fault.
Comprehensive insurance protects your car from non-collision damages.
Each type of insurance chave their own coverage and price, so it's important to weigh which one is the best for you at the budget you can pay for.
Ther eis not a magic formula that would tell to everyone “this is the right coverage for you”, everything depends on your personal circumstances.
What are the 3 Types of Car Insurance and How Much Do They Cost?
As we explained before, you have no choice but get a car insurance to drive protected and/or legally in most of the states. However, choosing the right coverage can be a real pain. So we’re going to explain what are the 3 main car insurance policies in the country: liability, collision, and comprehensive, and provide average costs and levels of coverage according to Bankrate.com.
Liability Insurance:
Liability insurance is what 48 states requires you to buy to drive legally on their roads. It covers bodily injury and property damage you cause to others in an accident. The average cost of liability insurance is around $565 per year, and it provides coverage of up to $100,000 per person for bodily injury, up to $300,000 per accident, and up to $100,000 for property damage.
Collision Insurance:
Collision insurance protects your car in case of an accident, and they will pay the repair and replacement bills of your car regardless of who is at fault. Remember, that’s an optional coverage, but it's recommended and in most situation requested by lenders if you have a new car. According to Bankrate, the average cost of collision insurance is $363 per year, and it covers the value of your car up to its current market value.
Comprehensive Insurance
Comprehensive insurance is the coverage that will protect your car against any sort of non-collision damage. This includes theft, vandalism, fire, and acts of God. In fact, this is also an optional coverage for your car, but if you live in those states with high risks of theft or natural disasters, you will need that one. According to bankrate, the average cost of comprehensive insurance is around $159 per year, and it covers the value of your car up to its current market value.
Which Type of Car Insurance is Right for You?
There is not a common type of car insurance that can be the right one or not, everything depends on you what do you need and what not. Most lenders will request you to buy comprehensive and collision coverage when you’re going to buy a new car. If you’re going to insure a cheap old car and you’re going to buy a new one soon, then collision and comprehensive coverage could not be the best idea because you’d pay way too much the actual cost of your car to be covered, in that case, you should just buy liability insurance for your car and it will more than enough. Howeve, if you’re driving an old car and you can’t affort to buy a new vehicle soon because your credit score is poor, then you should add collision coverage towards liability to get some help paying for your vehicle’s replacements.
Comprehensive insurance is a good choice if you live in an area with a high risk of theft like Albuquerque or in those states where natural disasters are somethign quite common to see like Florida (hurricanes), California (earthquakes), or Michigan (floods). Remember, each insurance will cost you more or less depending on the amount of coverage youwant to purchase for your car.
Conclusion:
Car insurance is a something you must to buy when you’re living in 48 out of 50 of the states in the country and you want to register your new car, but choosing the right type of insurance can be something easier to say than to do. Liability insurance is the minimum coverage required by 48 states in the country, this one will only cover the damages or injuries that you cause to others, and it won’t pay any repair or replacement for your vehicle. Collision insurance will protect your car agains any accident that has been caused by a collison, regardless of who is at fault, in the other hand comprehensive insurance covers protects you from non-collision damages to your car like the acts of God, vandalism or theft. As you can see, each coverage is completely different from each one, and their prices also vary. Remember to drive safe to get better rates in the future.
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