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What Type of Car Insurance is the Best for Me?

What is the Best Type of Car Insurance to Get?

The importance of car insurance cannot be overstated due to the fact that accidents are unavoidable and can occur at any time or place. An automobile insurance policy covers you in the event of car damage caused by accidents or unforeseeable circumstances. But, you might be asking yourself- What type of car insurance is the best for me?

Choosing the right car insurance policy or coverage can be challenging. The most effective strategy to manage this challenging aspect is to prepare for all the reasons you might need your insurance in the future.

This article will go in-depth on why you need to insure your car and also provide you with the type of car insurance to choose from. But first, let us give a quick overview of car insurance.

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What Is Car Insurance?

Car insurance is a specific type of insurance coverage in which the insurance company protects the insured person from financial loss when engaged in an accident, theft, loss, or other damages to the person’s vehicle.

car insurance coverage

This protection is effective when you pay the agreed-upon yearly payment as specified in your policy. The amount of financial protection you have depends on the type of policy you have, so that is why it is so important to choose the right kind of coverage.

Here’s what could be covered by car insurance:

  • Collision Damage 
  • Damage To Property
  • Bodily Injuries Caused By a Car Accident
  • Medical Bills Acquired During the Accident

Accidents are often inevitable; therefore, getting your car insured relieves you of the burden of unexpected financial loss. 

Why Do You Need to Insure Your Car?

Here are a few reasons why you should insure your car:

  1. Protect yourself and others

A car accident may happen anywhere, at any time, and to anyone, regardless of who is in the vehicle. The ability to protect yourself and others is one of the most significant reasons to have vehicle insurance. For example, if you are in an accident and do not have trustworthy insurance to cover your expenditures, you will definitely spend a significant fee to cover any injuries to yourself or the other person. 

Auto insurance coverage covers medical expenditures incurred as a consequence of an accident-related injury. The insurance provider will pay for some or all of your medical expenditures. This could include surgery or hospital visits, saving you time and money.

  1. Protect your vehicle

Car insurance can also protect your vehicle from unforeseen events or damages. If the car suffers losses or damages due to incidents such as explosions, strikes, fire, theft, and more; with comprehensive auto insurance coverage, you can be confident that it can be repaired and restored. 

  1. Covers third-party damage

If your vehicle gets involved in an accident that causes harm or loss to the property of third parties, your car insurance will cover it (to an extent). Depending on your type of coverage, the insurance company will cover your expenses to repair, pay for medical bills, and so on. Without having comprehensive or third-party insurance, you will be obligated to pay third-party losses such as hospital bills, property or car repairs all by yourself. 

  1. Covers legal costs (if applicable)

Victims of accidents will frequently seek to sue you for damages or injury. If you are involved in a lawsuit, your car insurance company will safeguard your wallet from these costs, as legal fees can quickly deplete your savings and wallet. This means having a car insurance policy covers some or all of the legal costs in the event of legal actions being taken against you as a result of a car accident.

Types of car insurance

Below are the types of car insurance:

Liability insurance

Liability insurance is one of the most mandatory types of car insurance car owners must have.

collision coverage

In some states, liability coverage is mandatory for all drivers. This insurance policy covers the injuries and damage you cause to others during a car accident. It covers liabilities like bodily injuries (medical expenses and legal fees) and property damage (damage to others’ property).

The insurance company will cover all the costs up to the limit of your policy. However, it is important to keep in mind when considering what car insurance policy is right for you when you get liability insurance. If you suffer any injury or loss as a result of the accident, this car insurance coverage will not cover your damages or medical bills.

Personal injury protection (PIP) car insurance

This type of car insurance covers injuries and other medical expenses from a car accident, irrespective of who is at fault. Also known as no-fault insurance, if a person with PIP coverage suffers injuries in an automobile accident, the insurance company pays the costs for you and your passengers regardless of who caused the accident. Even if the other driver does not have insurance, he/she may be entitled to some benefits as a result of the individual with PIP coverage.

Fully comprehensive car insurance

Fully comprehensive automobile insurance is basically the highest level of car insurance you can get. It protects and covers your car from damage due to natural disasters such as fire, explosions, weather, and other types of natural hazards. It also protects you if your automobile is stolen or damaged due to vandalism or attempted theft.

Basically, it covers damage to your vehicle caused by events other than collisions. Fully comprehensive auto insurance is generally the most affordable. 

Collision insurance

When two drivers collide, collision insurance covers the damage. It also covers damage from accidents and incidents involving a tangible item, such as a fence or pole. 

It is important to note that collision insurance does not pay for damage to another person’s car, damage to yours as a result of fire or weather, and as well as car theft. The above-mentioned damages are covered by comprehensive insurance. Comprehensive insurance may be offered in conjunction with collision insurance and is typically needed if you have a car loan or lease.

Uninsured/Underinsured Motorist Coverage

This coverage would protect you if you had an accident with a driver who doesn’t have enough insurance or has zero coverage. It helps cover medical expenses, lost wages, and damages caused by uninsured or underinsured drivers.

How Can I Choose What Type of Car Insurance is the Best for Me?

Choosing the right car insurance coverage that will be best for you can be a crucial decision. Here are some factors to consider when selecting car insurance:

  • Legal Requirements in Your State (Some states require just liability coverage)
  • Your Vehicle’s Value
  • Your Driving Habits
  • Personal Financial Situation
  • Deductibles and Premiums
  • Additional Coverage Needs
  • Insurance Provider Reputation

Although it is one of the biggest factors, don’t think about the cost when getting car insurance. As a result, it is better to get a balance between affordability and adequate coverage.

Get Your Car Insurance Now!

Obtaining car insurance is important regardless of the age of the vehicle. Being prepared for the worst is always essential. In the event that you need a car title loan, having car insurance will definitely come in handy.

If you want to compare car insurance offers online and get real-time results, click here! Max Cash is here to make your car shopping experience easier by partnering with multiple insurance providers. It’s never been easier to find the most suitable fit for your car and your budget.5

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By Z. Garcilazo

Z. Garcilazo is a financial writer for the Max Cash team with over 2 years of experience in the financial services industry. She has a passion for finance, and routinely authors blogs about budgeting, banking, and more.