As you may already know, it is legal to buy Minimum Liability Auto Insurance for your car. For those who are unaware of this term, it refers to the minimum insurance you should have before you can drive. However, there are some things you should know about car insurance before you are out buying one:
- Your car might cost you more than Minimum Liability Auto Insurance does!
If you do a bit of research, you will realize specific car models are stolen more often than others. The reason for this isn’t aesthetical or how expensive a vehicle is. Thieves are more likely to go after cars with parts they can sell at higher prices!
- There are limits to Minimum Liability Auto Insurance
The restrictions will vary from state to state, so get professional help before you begin relying on your insurance for protection. Alternatively, state laws could mandate additional coverage. For instance, in the following states, a driver has to carry no-fault insurance as well:
- New York
- Puerto Rico
- New Jersey
- North Dakota
A no-fault insurance policy is one that will pay regardless of which driver is at fault. Even so, there is variation in the way this policy works from state to state.
- Minimum Liability Auto Insurance may not be a good fit for you…
When it comes to this type of coverage, you will only get the amount of any damages that you signed up for. If, for example, you are sued for something you were liable for, the amount might not cover the costs incurred – or any legal defense that you need. Therefore, do your homework when determining which coverage is best for you. Two add-ons that could save you from considerable expense later include coverage for collisions and comprehensive coverage. While you aren’t required by law to buy them, they are the ones you will need the most in case of animal collisions, car thefts, etc.
The insurance coverage you need besides the Minimum Liability Auto Insurance depends on the following factors:
- The value of your personal assets. You might need more protection, for instance, in case an accident occurs and the other driver sues If the coverage you have doesn’t pay for the damages, then personal assets, such as your house, could be in danger.
- Your budget also matters. You can only purchase what’s in your budget. Being unable to pay your premium can result in a more comprehensive yet expensive coverage being canceled. It can lead to lapse of coverage and leave you unprotected.
- This is identical to the previous point. If you can afford to pay out-of-pocket in case of a claim, then maybe you can manage lower limits. Pay a higher deductible only if you can handle the risk that comes with it.
- The state of your vehicle. Say, you just purchased a new car. Wouldn’t you want more than just minimal protection for it? This would be even more useful if you have leased it. Some lien holders even require you to have collision and comprehensive coverage.
These are the most common additional types of coverage you may need:
- Collision coverage will help reimburse for the repairs to your car in the event of an accident.
- Comprehensive coverage will be helpful to you if your vehicle is damaged due to any incidents other than a crash or collision. It will also work if your car has been stolen.
- The Personal Injury Protection (PIP) coverage will pay for the medical expenses after an accident for you and your passengers. In some cases, it can also cover up the wages you lose due to time lost at work because of your injuries.
- Un/Under-insured Motorist Coverage comes to your aid when you are hit by someone who doesn’t have insurance or has minimal coverage.
All the factors mentioned above can bring your insurance rates lower or higher. Therefore, keep in mind these things when purchasing auto insurance.
Just keep in mind that while it is essential to meet the Minimum Liability Auto Insurance requirements for your state, you don’t have to stop there.