Car insurance is both legal and financially protective in most states; Bankrate’s Auto Insurance Guide helps drivers make informed decisions when seeking quotes and purchasing policies. By detailing fundamental coverage types, state requirements and financial nuances associated with auto policies, drivers can confidently make these purchases and request quotes with confidence.
Legal Requirements
New York’s thousands of miles of roadways are traversed annually by more than 11 million licensed drivers, yet those same roads often witness serious accidents that result in injury and even death for drivers. Carrying adequate car insurance is therefore both legally required and essential protection against potential dangers on these roadways.
Although most states require you to carry at least some liability coverage when operating a vehicle legally, experts often advise purchasing much higher limits than are legally mandated. This is due to an accident resulting in serious injuries or death being covered by minimum coverage amounts; should that happen then these minimum amounts may simply not cover everything necessary to recover fully. This guide aims to demystify auto insurance fundamentals by exploring basic coverage types and limits available as well as how you can choose one that best meets both personal and financial needs.
Optional Coverages
Some types of auto insurance are required in most states while others are optional. Drivers looking to reduce out-of-pocket expenses often opt to purchase additional protection at a more reasonable cost than paying out-of-pocket for damages without coverage. Purchasing additional protection usually ends up more cost effective.
Comprehensive and collision coverages are two optional coverages to consider for your vehicle. Comprehensive provides reimbursement in case of theft, vandalism, acts of nature such as glass breakage and animal strikes while collision protects it against collisions with other cars, buildings or structures like fences and guardrails. Some lenders require these policies if leasing or financing a car.
Optional coverages that may provide assistance include uninsured/underinsured motorist, personal injury protection and medical payments coverage. Medical payments coverage reimburses you and your passengers for medical costs related to injuries sustained regardless of who caused the accident, and pays out for property damage caused either directly by yourself or an uninsured driver while operating your vehicle.
Other coverages might include roadside assistance, rental car coverage and new car replacement. Roadside assistance provides coverage for services such as towing and locksmith services as well as battery jumps up to your policy’s limits; rental car coverage reimburses costs associated with renting an alternative car should yours become inoperable as part of an accident-related claim, up to your policy limits. Finally, new car replacement will reimburse expenses associated with renting another vehicle when yours cannot work after an incident; these options can also cover you up until your policy’s limits.
Limits of Coverage
Liability limits on an auto policy represent the maximum amounts that the insurer will cover in an accident, usually represented as 100/300/50 for example. The first number represents bodily injury limits per person while 100 represents bodily injury limits overall. If someone is injured due to the policyholder, this amount will cover their medical bills; while the second number stands for property damage liability limits per accident. Insurance will cover the costs associated with repairing or replacing property damaged due to an accident caused by a policyholder, up to their total combined liability limit (TCL), which represents how much will be spent covering losses from one event.
Auto policies allow for flexible adjustments of limits; however, higher limits often carry an increased premium cost. When selecting your policy’s limits it’s important to balance how much financial risk you are willing to take with the cost of premium.
As well as liability coverage, most policies include collision and other than collision coverage to cover damage to your vehicle in an accident resulting in collision with another car or objects. Many banks and lenders require this coverage if financing or leasing your vehicle from them.
The Process of Purchasing Coverage
Car insurance is one of the most essential financial products you’ll purchase, yet can often be daunting and bewildering. Bankrate’s team of licensed agents aims to make the process of selecting policies easier while helping consumers compare quotes.
At first, it’s essential that you identify which form of coverage best meets your needs. There are a few key considerations here.
Bodily Injury Liability-Pays for injuries you cause others in an accident. Most states mandate minimum amounts, but higher limits should usually be purchased as having sufficient liability protection may protect assets such as your home and savings accounts from possible litigation.
Property Damage Liability-provides protection to any damages to another’s property caused by you as a driver, such as repairs or medical costs that arise after an accident occurs; often required by law.
Comprehensive and Collision coverage are other optional coverages often purchased by drivers, which provide coverage in the event of an accident, theft or weather events that causes damage to their vehicle. Both have limits which it’s wise to discuss with their agent or broker prior to purchasing coverages.
