The most basic type of insurance that a person can get is liability insurance. In most states you are required to have insurance to be able to drive legally on the road. Liability insurance is the most inexpensive type of insurance that will allow you to drive legally. Liability insurance only covers other vehicles and persons in those vehicles if you are in a car accident.
The minimal amount of car insurance that is offered by a company is usually referred to as the basic limits of liability. While the minimal amount varies from company to company it usually is $25,000/$50,000. This means that the damage done to the third party’s property and bodily harm will be covered up to these limits. In some cases there is a company that offers only property damage. If you happen to choose this coverage then you will be responsible for any bodily harm.
If you want to car insurance cover your vehicle as well as the others you can choose a different type of insurance known as full coverage. If you have an expensive car or you want extra coverage in case something does happen, you can get a full coverage plan. Even though they are more expensive they may be a better solution depending on your situation. Plans can range from as little as $25,000 in coverage up to millions.
By choosing higher limits you will protect yourself from being sued or having to pay what your insurance doesn’t. While many accidents are covered by basic limits, more serious accidents can leave you paying the difference. So if you only have $25,000 coverage and the accident totals $50,000 you’re stuck paying the rest.
As you may expect the price for your premium will go up with the higher coverage plans. However there are some other factors that can increase the price of your plans as well. If you’re a young driver, have a bad driving record, or a sports car you are likely to pay higher premiums. Likewise if you’re the parent of someone who has one of these three items and he or she is on your plan you can expect to pay higher rates as well. You should also remember that the medical coverage is always the larger number and is usually double the amount of the property damage coverage due to medical bills being so expensive.
Driving without insurance is risky and illegal in some states. It’s best to have even the basic limits of liability to protect yourself. If you have a newer car then you will want to have better coverage. In most cases you will want to have collision and comprehensive insurance to protect your car in the event of an accident, theft, or bad weather.
Whether you have an older car or a car that’s 2 days old, it’s important that you choose the right type of insurance for your vehicle. If you don’t know what type of coverage you should get for your vehicle then you should consult an insurance agent.